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The American Prospect - articles by authorenGreece on the Razor's Edgehttp://prospect.org/article/greece-razors-edge
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<p>A pedestrian passes anti-austerity graffiti in front of Athens Academy on Thursday, January 29, 2015.</p>
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<p><span class="dropcap">T</span>he morning after Alexis Tsipras’s Syriza coalition won the Greek elections in late January, an old friend called from Athens. He’d been a senior figure in the Papandreou government that had struggled for nearly two years to stave off the collapse of the Greek economy, so he knew firsthand just how deadly the chalice now about to be passed to Tsipras was.</p>
<p>He also knew Tsipras personally—Greece is a small country—as well as Yanis Varoufakis and other key figures who would be appointed to the new government. And he clearly understood what Tsipras aimed to do to quickly and decisively break “the golden shackles” that had bound Greeks in a crushing web of debt: face down the creditors. </p>
<p>But my friend also knew firsthand the stubbornly conservative and judgmental consensus that had steadily solidified, not just among European elites but among a broader European public, that Greece needed to pay what it had borrowed—and needed to keep its agreements to reform. </p>
<p>Tsipras had won not just because the European view of Greece as a morality play is manifestly unfair and humiliating to Greeks—an imposed burden, composed of equal parts harsh ideology and lousy technocratic advice—but also because most Greeks couldn’t fathom that view’s hold on their fellow Europeans, given the prolonged pain it had brought their country.</p>
<p>So we talked over the options we thought Tsipras would have in some detail, weighed the actors and their abilities, calculated the scenarios that would likely soon unfold. But as our conversation wound to a close, my friend said something that still rings painfully true, words I’ve replayed in my mind repeatedly these past agonizing weeks. </p>
<p>“I fear,” he said simply, his voice flat and sad, “that Alexis is about to discover that yesterday was the best day of the rest of his life.”</p>
<p>Three months on, Greece’s economy is, once again, dancing at the edge of a financial and economic precipice—and Tsipras’s days have clearly gotten worse. The Greeks eerily seem to know what they’re facing, their creditors know it, the world knows it—yet the sense of urgency and the willingness to negotiate what’s needed to halt the fall over the edge just aren’t there. </p>
<p>In Athens, the massive rallies that once filled Syntagma Square outside the Parliament have been replaced by ominous silence. Popular support still clings impressively to the new government—70 percent support it in some polls, twice what Syriza won in the elections. Few, however, are convinced Greece’s partners mean to negotiate a deal Greeks feel they can live with.</p>
<p>Meanwhile, across northern Europe, political parties on the right (predictably), the center (alarmingly), and the left (appallingly) have refused to pressure their creditor governments toward the debt write-down that’s the only plausible escape route left from Greece’s trap. The press consensus is barely better—an echo chamber of Europe’s Calvinism, with only a few voices calling for “restructuring”—the word “write-off” verboten. Meanwhile, the technocratic denizens of think tanks talk in terms of micro-adjustments that nowhere acknowledge how technocratic thinking has failed Europe (not just Greece) on a scale reminiscent of Versailles after World War I.</p>
<p>In 2010, Greece became the operating room for the largest financial “rescue” surgery in history. For several months that summer and fall, as the economy kept hemorrhaging jobs and output, millions of Greeks, from the prime minister on down, hung on, hoping that the International Monetary Fund, the European Central Bank, and Eurocrats in Brussels (the so-called “Troika” doctors in charge of the rescue surgery) knew what they were doing. After all, they were in charge, and swore that they could stop the bleeding—and then very, very slowly get the patient back on her feet.</p>
<p>They were wrong—and the patient, who kept bleeding, is now once again relapsing. </p>
<p>The next likely step is that Greece, because the government is running out of money to pay all its wages and bills, will enter technical default fairly shortly and stop payments to its foreign creditors—most likely to the European Commission or the European Central Bank. </p>
<p>By itself, this means little. (During negotiations in 2011, Greece entered technical default before striking a deal to “haircut” private bondholders.) But the missed payment will set in motion a series of cross-default clauses that could very quickly push Greece’s major banks toward their own defaults. Since Syriza took office, money has been rushing out of Greek banks at a rate not seen since the crisis first began in early 2010. And that bank run will only accelerate with the technical default, as depositors worry that the government may soon impose capital controls, limiting their rights to take out money from their accounts.</p>
<p>The impact of all this on Europe won’t be as bad as some predicted four years ago—a continent-wide meltdown just 18 months after Lehman’s collapse—because most of the money owed is now owed to governments or the central bank, and not to private banks, insurance companies, or hedge funds. But the result will do little to help the long-stalled recovery of the European economy.</p>
<p><span class="pullquote-left">If Greece’s technical default happens, there may finally be a deal struck—but don’t expect a miracle. </span>There will be vagueness on crucial details, worded so that both sides could claim victory, with more months of micro-negotiations ahead. Lacking permanent solutions, investors predictably won’t invest, banks won’t lend, money will keep bleeding out of the country, and unemployment will stubbornly endure at levels not seen since the Great Depression. In other words, no clean resolution of anything seems at hand in this modern Greek tragedy.</p>
<p>Greek exit from the euro, of course, exists as the one “clean” option—but in much the same way that the patient’s suicide would represent a clean break from the travails of living. Abandoning the euro for a return to the drachma would likely leave Greece with a currency of half the purchasing power, in effect doubling the price of imported petroleum, of cars and trucks, of pharmaceuticals, and even food—on all of which Greece has long been dependent. The debt Greece owes in Euros—175 percent of its GDP—would double to 350 percent, and whatever the Troika members might do about collecting the money Athens owes them, the one certainty is that vulture funds that quietly bought up Greek debt for pennies on the dollar would drag Greece through years of costly litigation, just as they have Argentina.</p>
<p>There is, in short, little by way of a clear or simple path to solving this crisis, save the obvious, which has so far proved quixotically elusive: a massive write-down of governmental debt and a serious strengthening of Greece’s banking system that would pump in the liquidity needed to restart the country’s economic engine.</p>
<p>Greece’s economy today is barely 2 percent of Europe’s—and a major write-down of its debt, frozen but written off over many years, would amount to a tiny fraction of 1 percent of Europe’s economy each year. The price the continent would pay for this would be small, whereas the moral victory would be enormous, not just to 11 million suffering Greeks but also to Europe as a whole. Clearly, the bitterest lessons taught by the 20th century—that the quicksand of petty nationalism, stereotyping of the other, and contempt rather compassion for the vulnerable—should not pretend to be the ground of Europe’s future.</p>
</div></div></div>Wed, 22 Apr 2015 22:58:03 +0000222126 at http://prospect.orgRichard ParkerElection 2014: Surge or Theft?http://prospect.org/article/election-2014-surge-or-theft
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<p>In this November 6, 2012 file photo, a voter holds their voting permit and ID card at the Washington Mill Elementary School near Mount Vernon, Virginia. Across the South, Republicans are working to take advantage of a new political landscape after a divided U.S. Supreme Court freed all or part of 15 states, many of them in the old Confederacy, from having to ask Washington's permission before changing election procedures in jurisdictions with histories of discrimination.</p>
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<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16"><span class="dropcap">L</span>ast Tuesday’s election was, by any measure, a sweeping victory for the Republicans—their second consecutive midterm sweep since Barack Obama took office, by which they’ve now picked up a total 77 seats combined in the United States House of Representatives and the Senate. In the House they’ve not had a majority this size since Herbert Hoover occupied the White House—and they control more statehouses now than at any time in the nation’s history. But what does that mean—or more importantly, what does it portend, for Gridlock Nation?</span></p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">Predictably, Republicans are claiming a mandate, while not a small number of commentators are noisily calling the results a “stunning rebuke” to the president and the Democrats. <span class="pullquote">Yet given the size of their losses, Democrats from the Oval Office on down have remained surprisingly calm—even alarmingly detached, some might say.</span> Harry Reid and Nancy Pelosi, at the moment, look set to retain their leadership posts, and the president so far is talking tough on his plans to use executive powers to govern in his last two years. Meanwhile, they’re all staying brave, it seems, by telling themselves (and anyone who’ll listen) two heartening but simple stories, one backward-looking, the other predictive.</span></p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">The backward-looking story relies on a near-invariant about midterm elections: that the party in power loses seats. (It’s a rule that, as political scientists say, is “highly robust,” meaning that it’s held in </span><a href="http://www.presidency.ucsb.edu/data/mid-term_elections.php">19 of the past 21 midterms</a>.) The forward-leaning story meanwhile is pointing at the House and Senate races in 2016, confident that Republicans are far more vulnerable for what they claim are two strong reasons: The GOP has far more seats at risk two years from now, and turnout in presidential years should favor Democrats in terms of how many and which voters are likely to show up to vote.</p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">But is that how we should be reading this election?</span></p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">Over the past several days, as more and more details about the various races around the country have come in, three things have stood out for me—yet are garnering less attention than I’d expect.</span></p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">First, Americans didn’t overwhelmingly choose Republicans over Democrats; if anything, they overwhelmingly voted “no” on both parties. Midterms always produce lower turnout than presidential years—but turnout in 2014 drew just 36 percent of the electorate. That’s not just off-year low—that’s the </span><a href="http://time.com/3576090/midterm-elections-turnout-world-war-two/">lowest turnout rate since 1942</a>, the middle of World War II when nearly eight million voters were in uniform and absentee balloting was rare.</p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">Second, for those who did turn out, nearly two decades of Republican-crafted voter ID laws in 33 states took their toll in key races. “Tuesday </span>was the first federal election under laws that actually make it tougher to vote in 15 states," <a href="http://www.economist.com/blogs/democracyinamerica/2014/11/voter-laws" style="font-size: 12.7272720336914px; line-height: 20.0063037872314px;"><em>The Economist</em> noted</a>.<span style="font-size: 12.7272720336914px; line-height: 20.0063037872314px;"> "</span><span style="font-size: 12.7272720336914px; line-height: 1.538em;">Eleven states rolled out new requirements for photo identification at the polls; nine states made it trickier to register to vote; eight states cut back early voting days; and three made it harder to restore voting rights to former criminals.”</span></p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">In the North Carolina race for U.S. Senate—at $107 million, the </span><a href="http://www.nybooks.com/blogs/nyrblog/2014/nov/08/midterms-why-republicans-won/?insrc=wbll">most expensive statewide race </a>in American history—state House Speaker Thom Tillis beat Senator Kay Hagan by a margin of 1.7 percent, or about 48,000 votes, under one of the harshest new election laws in the country. It’s a law that Tillis himself helped craft, that eliminated seven early voting days and same-day registration, and prohibited voting outside a voter’s home precinct — all disproportionately likely to affect student and African-American voters. In North Carolina’s 2010 election, 200,000 voted in the early voting days, while in 2012 nearly 700,000—including one-quarter of all African Americans voting in the election—did, as well; this year<a href="http://www.brennancenter.org/blog/how-much-difference-did-new-voting-restrictions-make-yesterdays-close-races"> that was illegal</a>.</p>
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<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">A month before the election, the Government Accountability Office released a study showing the impact of voter ID laws in Kansas, where in 2012 turnout—a presidential year—was reduced 2–3 percent, and as much as 4 percent,</span><a href="http://www.politico.com/story/2014/10/voter-id-laws-minorities-111721.html"> among the young and minorities</a>. In last week’s Kansas gubernatorial race, Republican Sam Brownback beat back challenger Paul Davis by a margin of 2.8 percent, or less than 33,000 votes.<a href="http://www.brennancenter.org/blog/how-much-difference-did-new-voting-restrictions-make-yesterdays-close-races"> According to the Brennan Center</a>: </p>
<blockquote><p dir="ltr">Kansans faced two new voting restrictions this year—a strict photo ID law that was put into effect right before the 2012 election, and a new documentary proof of citizenship requirement for voter registration … We know from the Kansas secretary of state that more than 24,000 Kansans tried to register this year but their registrations were held in "suspense" because they failed to present the documentary proof of citizenship now required by state law.</p>
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<p dir="ltr">(The state’s incumbent senator, Pat Roberts, a Republican, meanwhile held on against an independent by just 53 percent of the vote.)</p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">Down in Florida—legendary home of the hanging chad—Republican Governor Rick Scott narrowly defeated former Governor Charlie Crist by less than 72,000 votes, a 1.2 percent margin. Under laws passed by Scott and the Republican legislature, 1.3 million Floridians couldn’t vote last week because they’ve been convicted of a crime, even though they’ve served their time. (As governor, Crist had created a pathway to allow many of the former convicts to vote—which Scott reversed, effectively disenfranchising nearly one-third of African American male voters in the state.)</span></p>
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<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">Meanwhile in Virginia, nearly 200,000 otherwise-qualified citizens were denied their voting rights because of improper or inadequate IDs; in Texas, the number was more than 600,000. All part of a 33-state effort to guarantee against voter fraud—a danger certifiably</span><a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2014/08/06/a-comprehensive-investigation-of-voter-impersonation-finds-31-credible-incidents-out-of-one-billion-ballots-cast/"> documented in 31 instances</a> out of more than one billion votes cast since 2000, according to the <em>Washington Post</em>.</p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">Voter restrictions weren’t, however, the only thing helping to make this a record-low year for turnout. Money—“the mother’s milk of politics,” in the words of the legendary Jesse Unruh—was playing its role as well.</span></p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">Final figures aren’t in yet but it’s likely that donors spent nearly $4 billion on this off-year race for 435 House and 33 Senate seats. It’s not all about the Koch brothers—but a lot of it is, especially since, under Chief Justice John Roberts, the Supreme Court opened the floodgates for dark money from an unlimited number of undisclosed donors in the name of free speech. In Mitch McConnell’s race, nearly $12 million in dark money was spent, 60 percent of that by a so-called social welfare group called the Kentucky Opportunity Coalition, against his opponent Alison Lundergan Grimes. In Colorado, it was even more: $18 million spent for Cory Gardner to help defeat Mark Udall; in North Carolina, $13 million for Thom Tillis against Kay Hagan. The list goes on—all told, so far, nearly a quarter-billion dollars in dark money, nearly 70 percent of that to support Republican candidates, has been officially reported. Then on top of that quarter billion was an additional $50 million</span><a href="http://www.nytimes.com/2014/11/09/opinion/sunday/dark-money-helped-win-the-senate.html?_r=0"> spent by the super PACs</a> that must disclose their donors, allowing the rich to bypass limits placed on what they can give individual candidates directly.</p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">Dark money, voter suppression, an electorate unwilling to show up at the polls—these are not reason for optimism among Democrats two years from now, whatever happens in Washington between now and November 2016. I celebrated my birthday last Wednesday, and—trying to pick up the whistle-past-the-graveyard party line—reminded myself that I was born on Election Day 1946, when the GOP won control of Congress for the first time in two decades, and Richard Nixon and Joseph McCarthy were first elected. I tried telling myself that two years later, the Republicans had lost Congress and Truman had legendarily defeated Dewey. But then I reflected on the Nixon-McCarthy legacy, and the world they’d left behind before they were both finally driven from public office in disgrace.</span></p>
<p dir="ltr"><span id="docs-internal-guid-1624e610-a01d-781b-6fcf-cdf089b71c16">My slice of birthday cake gave me less comfort than I hoped it would.</span></p>
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</div></div></div>Tue, 11 Nov 2014 19:05:46 +0000221226 at http://prospect.orgRichard ParkerHow They Wrecked the Economyhttp://prospect.org/article/how-they-wrecked-economy
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"> <p>During a break at a recent conference on the future of economics, I was carrying the galleys of Jeff Madrick's new book, <i>Age of Greed</i>, when I got into a conversation with Paul Volcker. At 83, the former Fed chairman is a bit hunched but still sharp as an old hawk. Glancing at the book's title, he asked what it was about. "The recent meltdown on Wall Street," I answered, "and how it evolved from deep origins over the past 40 years."</p>
<p>"Ah, that's a good topic," he replied, "though frankly, I've never thought greed defined just one age in American history." The twinkle in his eye made me realize he'd formulated his answer before asking his question--a valuable talent for a central banker. </p>
<p>Volcker is right, of course, that far too much of American history is a history of greed--for land, furs, minerals, slaves, factories, art, power, recognition, and money without limits. Yet many of us want to believe that America is about something more and that our common effort can lead to a common good, not just the piling up of the latest plutocrats' privileges. Not all eras are defined by greed. For the first 30 years after World War II, for example, greed for a time seemed muted.</p>
<p>But no longer. Three years ago, when the nation plunged into the worst financial crisis since the Great Depression, many of us thought Americans would face up to the devastating real-world consequences of deregulated greed. There has been no shortage of discussion about the issues, to judge from the tsunami of books, articles, official reports, op-eds, and talk-show debates about the crisis. And Congress finally did pass the 2,300-page Dodd-Frank bill last spring--though today, skeptics increasingly outnumber optimists about the bill's ultimate impact, as regulators and lobbyists bow and twirl in their delicate saraband of power, shaping the regulations the law left undefined.</p>
<p>But if we consult the past, what should we expect? To judge from Madrick's excellent history of the decades from the Nixon years to the present, it's fair to say that more trouble lies ahead. His argument is straightforward: The meltdown of the multitrillion-dollar shadow world of collateralized-debt obligations, credit -- default swaps, and offshore special -- purpose vehicles was never the root of the problem. And better management of those instruments by temporarily chastened investors and traders, or regulators with better risk-management tools, won't prevent the next meltdown in a not-too-distant future.</p>
<p>Over the last 40 years, there has been an explosion in global financial markets (and traded assets and liabilities) relative to the size of the global economy. The explosion has been fed from several sources: a continuous stream of petrodollar profits earned by producers and Western oil giants; windfall trading gains piling up in low-wage countries (think China, for a start, or the sovereign wealth funds of Singapore or Dubai); and the creation of an unprecedented pool of private pension savings (401(k)s and individual retirement accounts in the United States, for example) flooding into financial markets every time payroll checks are issued.</p>
<p>Those trillions, in turn, have kept global real interest rates low (Federal Reserve Chair Ben Bernanke's "global savings glut") and encouraged commercial banks, hedge funds, mortgage brokers, and other intermediaries to come up with ever more complicated financial instruments to eke out tiny marginal gains in this low-interest world, a process made riskier through the use of greater leveraging to turn those paper-thin margins into massive gains.</p>
<p>An almost religiously ecstatic celebration of markets has justified this process, at least for the world's elites. And where justification by faith has been insufficient, the defense has invoked justification by unfathomable, mathematical complexity. Can you calculate the value at risk of synthetic derivatives? No? So please don't intrude.</p>
<p>But where did this world come from? Madrick's argument is that it arose from the contradictions of the 1970s, when the global financial system was suddenly destabilized. In 1971, President Richard Nixon cut the dollar free from gold, a connection at the heart of the Bretton Woods system that emerged from World War II. That link, plus global trade and capital controls of various kinds, had maintained a stable but strong economic expansion worldwide. Decoupling from gold, however, led to the dollar's downward drift against other currencies (which was Nixon's intent, since floating the dollar was his attempt at a cheap repair of America's growing trade deficit). Two years later, however, the Organization of Petroleum Exporting Countries--which had angrily watched its own income fall sharply because oil prices were dollar-denominated--struck back by quadrupling the price of oil.</p>
<p>The instabilities that flowed from Nixonomics and OPEC suddenly began to tear apart the once remarkably stable financial sector that had bankrolled America's postwar affluence. In that world, the risks of investment banking had been kept separate from the routines of commercial banking, the Securities and Exchange Commission had brought systematic oversight and disclosure to the nation's largest corporations, and the dollar's hegemonic power--thanks to its postwar emergence as the world's reserve currency--had encouraged American corporations to expand rapidly at home and abroad (the latter was new, in terms of scope and scale).</p>
<p><span class="pq">At the beginning of the Nixon era, a new generation of bankers and investors, untempered by depression and war, were hungry for greater profits than the regulatory regime had allowed them to earn.</span> When Nixon floated the dollar and OPEC followed by quadrupling oil prices, the new generation seized the moment. Most famously, Walter Wriston--the hard-driving, sharp-elbowed chairman of First National City Bank (predecessor to today's Citicorp)--led New York's most powerful commercial bankers into the uncharted waters of Eurodollar arbitrage, negotiable certificates of deposit, unprecedented lending to the Third World, and other then-revolutionary venues in search of superprofits--with a bravura and taste for rule-bending perfectly captured in the title of his memoir, <i>Risk &amp; Other Four-Letter Words</i>.</p>
<p>Brooks Brothers buccaneers like Wriston, though, could never have launched their quest alone. To succeed, they needed academics and politicians, the former to provide the intellectual rationale for the latter's dismantling of the 1930s regulatory architecture that had done so much to sustain postwar America's long, steady, and remarkably egalitarian growth years. As <i>Age of Greed</i> shows, Milton Friedman and Richard Nixon initially served as leaders in this march to the market, to be superseded in the 1980s by Arthur Laffer and Ronald Reagan, and in the 1990s by Robert Rubin, Larry Summers, and Bill Clinton.</p>
<p>But Madrick is also right to look beyond the field marshals at the top to highlight the financial revolution's officer corps and ground troops--the traders, investors, accountants, and lawyers whose innovations often leaped ahead of their commanders, leaving the latter scrambling to catch up.</p>
<p>Thus we meet figures such as Joe Flom, the mergers-and-acquisitions attorney who designed so many hostile takeovers so quickly that in little more than a decade, he and his colleagues shattered the genteel country-club prohibition on such takeovers to which generations of WASP CEOs and their bankers had adhered. We also (re)discover Michael Milken, the sorcerer's accountant with the ill-fitting toupee, who invented the modern junk-bond market, thereby providing the rocket fuel that launched the red-hot leveraged buyout business and helped push stock prices and CEO salaries to astronomical new heights.</p>
<p>There is also the unforgettable Ivan Boesky, king of risk arbitrage. His short-lived Reagan-era reign ended in prison, but not before director Oliver Stone immortalized him in <i>Wall Street</i> as the barely fictionalized Gordon Gecko, author of that eternal 1980s battle cry of the MBAs, "Greed is good."</p>
<p>As Madrick carries us briskly past these characters, past Reagan and Rubin, George Soros and Sandy Weill, Angelo Mozilo and Alan Greenspan, right up to today, we see for the first time clearly how deeply and systematically the entwined ideology, market innovations, and politics of our long Nixon-Reagan-Clinton-Bush era finally brought us to the global economy's shattering near collapse--and its slow and achingly fragile recovery.</p>
<p>It's this ability to move across politics, academic economics, and the intricacies of day-to-day finance at both the personal and institutional level that makes this such a valuable book. Other volumes have admirably captured one or another part of the story; none before <i>Age of Greed</i> has brought all the elements together so clearly and comprehensively. Beyond his scope, however, Madrick's strength is his voice--his ability to present all this complex history in a way that is neither dry nor lurid but rather shrewdly intelligent and easily digested. For the intelligent reader unversed in financial arcana, Madrick's will remain the benchmark book for years to come.</p>
<p>In the end, it's a sobering read, though, because after showing us how we got here, there's little Madrick can offer about the way out. But that is not his fault--and we owe him thanks for what he has done.</p>
</div></div></div>Thu, 09 Jun 2011 21:40:47 +0000149436 at http://prospect.orgRichard ParkerWhy They Winhttp://prospect.org/article/why-they-win
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"> <blockquote><p><b><a href="http://americanprospect.bookswelike.net/isbn/0618685405">The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics</a></b> by Jonathan Chait <i>(Houghton Mifflin Company, 294 pages, $25.00)</i></p>
<p><b><a href="http://americanprospect.bookswelike.net/isbn/0691130175">The Right Talk: How Conservatives Transformed the Great Society into the Economic Society</a></b> by Mark A. Smith <i>(Princeton University Press, 267 pages, $29.95)</i></p>
</blockquote>
<p>For the past 30 years, two questions have haunted liberals: Why do Republicans keep winning? And when will it end? With the GOP's crusade for a permanent majority undoubtedly faltering, it's not hard to see why liberals are optimistic these days. Yet I don't share that optimism. The Republican Leviathan has been pronounced dead half a dozen times, and it's risen each time. </p>
<p>But why? Jonathan Chait's <i>The Big Con</i> and Mark Smith's <i>The Right Talk</i> offer two of the latest clever answers to that question. Chait is a well-known journalist who began his career at the <i>Prospect</i> before moving to <i>The New Republic</i>, where he now writes the TRB column. In his new book he insists on being counted as a "moderate" even though he rightly admits to sounding quite immoderate, even "a bit like an unhinged conspiracy theorist." The book's thesis is that "a tiny coterie of right-wing economic extremists, some of them ideological zealots, others merely greedy, a few of them possibly insane," have captured ideological control of the GOP; that their supply-side theories are the cover for the ruthless greed of K Street's lobbyists and their corporate and mega-rich clientele, who are the <i>real</i> power behind the party throne; that mainstream journalists are appallingly servile, and often complicit, when confronted with this reality; and that most leading Democrats are no better because to a great degree they also have succumbed to variants of these economists' pseudo-theories. </p>
<p>It's a charge, in both substance and tone, that's pitch-perfect for an era defined by right-wing radio talkers and left-wing bloggers. Yet while Chait does come across as a bit unhinged, I must admit that he doesn't sound entirely crazy. (Whether he's crazy <i>and</i> right I'll take up in a moment.) </p>
<p>Mark Smith is an MIT-trained political scientist who teaches at the University of Washington. As befits the author of a university-press title aimed primarily at fellow academics, he comes across as more measured and sober than Chait. But, in some ways, Smith seems just as eager to persuade us that he's the one who's decoded the enigma of Republican success. Deploying a modern version of "rhetorical analysis" built on computerized word counting and statistical regressions on polling results, he tells us a tale not of outright deceit but of subtle manipulation. </p>
<p><i>The Right Talk</i> argues that during the last 30 years, even as Americans have become more insecure financially than they were during the previous three decades, the language and logic of the market have invaded almost every corner of society -- to the right's great advantage. Contrary to Thomas Frank's claims, the right hasn't used the culture wars to conceal its real economic agenda. In fact, conservatives have pressed the economic wars harder and convinced a majority of Americans that Republicans make better managers of the material world (Smith has lots of polls to make this point). </p>
<p>Smith's further point -- important by itself -- is that while Republicans shifted their rhetoric and arguments toward the logic of the market, Democrats made a different shift, to their own political disadvantage. As Smith puts it, the Republicans "changed their arguments while the Democrats changed their positions." So now the heirs to Keynes and the New Deal claim the mantle of fiscal responsibility (think Al Gore's lockboxes), while President Bush has thrown fiscal concerns to the wind. </p>
<p>But how persuasive are these interesting arguments? <i>The Big Con</i> is a great late-night or weekend read: It's good journalism, with crisp pacing, colorful anecdotes, and deft character sketches. We aren't just told what supply-side theory is; instead, we're taken to the Washington restaurant table where Arthur Laffer first sells his dinner companions -- Jude Wanniski, a young <i>Wall Street Journal</i> editorialist, and a gullible but ambitious young Nixon official named Dick Cheney -- on its merits. We then get a suite-by-suite tour of K Street today so we see how lobbyists have fed -- and fed off -- the Republican Revolution, and how this inevitably spawned the likes of Tom "The Hammer" Delay and Jack Abramoff as go-betweens. We're also taken on a quick tour of that derelict rustbelt called the Mainstream Media and reminded once again of its willfully self-destroying insistence on objectivity (here, oddly enough, Chait barely mentions Internet journalism, a great oversight given its growth and increasing influence). There's also a particularly good chapter on the poisoned pabulum that press and politicians feed us on "the character issue" nowadays; in it Chait recounts the Washington establishment's treatment of Clinton's, Gore's, and Kerry's character "flaws" -- and its reluctance to hammer at similar or greater flaws among candidates on the right, thereby allowing the right's own proto-hagiography to pass as one side of a "balanced" analysis. </p>
<p>Unfortunately, <i>The Big Con</i> also reminds us why a distinguished former editor of The Economist once insisted that journalism's first rule should be "simplify, then exaggerate." Chait too often opts for narrative pace and white hat–black hat clashes over a more useful depth. Born in the 1970s, he also has some peculiar ideas about earlier history. For example, he idealizes the 1950s as a golden age when GOP moderates ran the party. If only such statesmanlike elites, he says (pace David Broder), would reappear, and, cooperating with their Democratic counterparts, govern us again! Well, yes and no. Under Eisenhower, spending half the federal budget on the Pentagon to fight "godless Communism" narrowed the gap between the ideological right and corporate interests and made left liberals permanent "me-tooers" on national security. And the right -- think Joe McCarthy, Richard Nixon, the Birch Society -- was hardly complaisant. </p>
<p>Chait's also dodgy on his economics. He never crisply sorts out the competing ideological groups (supply-siders versus monetarists versus old-fashioned tax cutters versus single-issue groups) in a sufficiently coherent way, and he muddies questions such as the top tax rate in the 1950s and 60s versus the 1980s and 90s because he doesn't acknowledge the difference between nominal statutory and effective marginal rates. Conservatives deliberately howled about the high statutory rates as the reason why taxes on the rich had to be cut, even though the effective rates -- the ones people actually paid -- were always much lower. Chait shouldn't carry the right's water. </p>
<p>Smith's work suffers from the absence of the panache, color, and characters that abound in Chait's book. Like Isaiah Berlin's hedgehog, Smith has One Big Point to make -- that Republicans have used "economic talk" to reshape the country's political debate. In the process, Smith downplays or loses track of too many other factors in GOP successes, such as race, the culture wars, the white South's move to the GOP, globalization's toll on white male workers, and the hollowing out of the middle class. </p>
<p>Smith also doesn't take adequate account of other factors in the rise of the language of economics. For example, the other social sciences since the 1960s have turned toward the kind of rational-choice models favored by economists, but this isn't a result of GOP electoral efforts. Smith also doesn't adequately acknowledge the complex character of the Democratic Party, which was never simply a liberal party and has always had elements of both business and ideological conservatism. The Democrats after McGovern's ignominious loss in 1972 "changed their arguments" to become more market oriented partly because so many Democratic leaders and voters believed in those market-oriented policies. </p>
<p>Both <i>The Big Con</i> and <i>The Right Talk</i> are worth reading as provocations to greater clarity about the still unanswered question of why Republicans keep winning. Nothing foreseeable about the 2008 elections promises the kind of breakout that 1932 or 1964 represented in modern liberalism's history. In an America (and a world) of heightened material inequality, increasing environmental damage, damaged public institutions, and even more damaged trust in those institutions, perhaps the proper reframing of the question I posed at the outset is why Republican values, ideology, and institutions keep winning, regardless of whether Republicans or Democrats hold power. That, sadly, is of a scale and scope for which neither of these intelligent but ultimately insufficient books can give us meaningful guidance.</p>
</div></div></div>Sun, 21 Oct 2007 22:39:10 +0000146722 at http://prospect.orgRichard ParkerKenhttp://prospect.org/article/ken
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"> <p><i>“Words ought to be a little wild, for they are the assaults of thoughts on the unthinking.”</i><br /><br />--John Maynard Keynes</p>
<p></p><center> * * * </center>
<p>John Kenneth Galbraith loved words. Above all, he loved words he and others wrote about him. On this, “Galbraith's First Law” left no confusion: “Modesty is a vastly overrated virtue.”</p>
<p>So it's probably best that Ken Galbraith, who died April 29 in Cambridge, Massachusetts, at age 97, missed his obituaries. Far too many got him wrong.</p>
<p>The facts of his life were there, but on what he stood for -- and what finally his life should model for us -- the reviews were all too Galbraith-as-synecdoche, the man who bespoke another era, an earlier time that he and we had long outlived. In committing this error, all sides, even with their differences, seemed guilty: the liberals wanly elegiac at the loss, the conservatives smugly self-satisfied that the things Galbraith stood for had gone to their reward long before he did, the undecided and uncommitted nervously praiseful of his wit. All, in other words, played their parts as expected.</p>
<p>Except Galbraith.</p>
<p>To the very end, he was a figure of exceptional and independent mind and spirit, a skeptic always of power and privilege. He was a man who used both when given to him, but for the benefit of us all. He took sides, but he was never a partisan in the mean, small way of cable talk-show hosts or certain politicians today. He could befriend men as different as Henry Kissinger and Hubert Humphrey, Bill Buckley and Bill Clinton, and then, just as easily as he befriended them, deftly chastise them when they chose to do what he knew was wrong.</p>
<p>He sought to serve great leaders, and was often to others himself one -- as a careful insider when the opportunity to do something large presented itself, or as a courageous outsider when the times called for that.</p>
<p>Like his hero Keynes, he endured most economists only because he loved economics and wanted us all to live secure lives, not lives made more insecure by more bad economic theories. He loved literature and art and conversation, wrote successful (though not memorable) novels, collected Moghul paintings of great delicacy and beauty. He made friends easily, and kept most of them for a lifetime. He drank single-malt, neat.</p>
<p>He knew when to fight and what he would fight for, but hated war and the men who willingly encouraged it. He'd walked through death camps in Germany and the ashen streets of Hiroshima in 1945, and always spoke with vehemence thereafter against the military-industrial nexus that reigned in Cold War America. (At its height, the line he wrote for John F. Kennedy's Inaugural Address was this: “We must never negotiate out of fear, but we must never fear to negotiate.”) He loved the company of beautiful, intelligent women.</p>
<p>Shortly before his own death, Kennedy observed, honoring the poet Robert Frost, that</p>
<blockquote><p>The men who create power make an<br /><br />indispensable contribution to the<br /><br />nation's greatness, but the men who<br /><br />question power make a<br /><br />contribution just as indispensable ...<br /><br />for they determine whether we<br /><br />use power or power uses us. </p></blockquote>
<p>Galbraith lived what he wanted us to learn.</p>
<p>Not long after he died, a plain coffin was brought in to carry his 6-foot-8-inch body away. Fresh from some mortuary storeroom, it carried an inventory tag with these words: “John Kenneth Galbraith. Oversized.”</p>
<p>They got him just right. </p>
<p><i>Richard Parker is the author of</i> John Kenneth Galbraith: His Life, His Politics, His Economics. <i>An Oxford-trained economist, Parker teaches at Harvard's John F. Kennedy School of Government.</i></p>
<p></p><center> * * * </center>
<p>A memorial service for John Kenneth Galbraith was scheduled for May 31 at 2 p.m. at Harvard University Memorial Church in Cambridge, Massachusetts. </p>
<p>In lieu of flowers, donations may be sent to: Fogg Art Museum, Harvard University, Cambridge, MA 02138; Grace Cottage Foundation, P.O. Box 1, Townshend, VT 05353; or Economists for Peace and Security, P.O. Box 5000, Annandale-on-Hudson, NY 12504, <a href="http://www.epsusa.org">www.epsusa.org</a>.</p>
</div></div></div>Sun, 21 May 2006 16:15:07 +0000145443 at http://prospect.orgRichard ParkerBack To The Futurehttp://prospect.org/article/back-future-2
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"> <blockquote><p><b>America Beyond Capitalism</b> by Gar Alperovitz<br />
(<i>John Wiley &amp; Sons, 320 pages, $24.95</i>)<br /><br /><b>The Pro-Growth Progressive</b> by Gene Sperling<br />
(<i>Simon &amp; Schuster, 326 pages, $25.00</i>)</p></blockquote>
<p>These two books -- thick with prescriptions for America's future but ensnared in a briary thicket of often arcane facts, acronyms, abbreviations, and figures -- represent all the mixed virtues and vices of “pop policy” today (the perils of academic policy being another matter entirely). That is their less interesting feature. The greater is whether, once we've struggled through the thickets, they tell us something encouraging or alarming about the Democratic Party's -- and American liberalism's -- professional thought cadres, and their relevance to today's wars for political power.</p>
<p>What Gar Alperovitz and Gene Sperling share is a belief that detailed policy ideas matter in those wars. But the two authors are from different branches of the modern liberal tradition (different generations as well), and their motives, intended audiences, frames of reference, and goals are thus painfully at odds. It is here, however, that, read together, they have something to teach us -- though perhaps not what either intends. </p>
<p>Alperovitz is nowadays a 60-something professor of political economy at the University of Maryland, just outside Washington, D.C. Forty years ago he was a young New Left avatar, much admired for his <i>Atomic Diplomacy</i>, a coruscating revisionist history of American motives for dropping the bomb on Hiroshima. Over the next 30 years, his attentions turned from military and diplomatic history to writing about -- and sometimes working to carry out -- a variety of domestically focused “alternative economic scenarios.” Funded primarily by small foundations, he once described his work as aimed at “a socialist alternative” (more Fabian than Marxist, to be sure), but today -- reflecting the truncated hopes of the left -- says it is all about humane and reasonable improvements to our market-based economy.</p>
<p>Many of his proposals, which he believes could lead America to rebirth as a “Pluralist Commonwealth,” will be familiar to progressives of his generation, as they involve various and sundry schemes for worker ownership, major amelioration in working conditions (a 25-hour workweek, he says, should be a major goal), diverse innovations meant to empower progressive state and local governments against mobile and predatory capitalism, greater political regionalism as antidote to what he sees as overwhelming national complexities (though he also favors a nationwide “Public Trust” that would “take the place of current elite and corporate ownership” of large-scale capital) -- plus attentiveness to more garden-variety issues such as campaign-finance reform, protection of Social Security, and ways to solve the health-care and environmental messes we're in, among others.</p>
<p>Alperovitz claims proudly that he is guided by Tolstoy's dictum for intellectuals that “if you can't explain it to an ordinary peasant, that is your problem, not theirs.” Setting aside the question of who is Tolstoy's peasant today, surely <i>America Beyond Capitalism</i> does not meet that test. Although it, like Sperling's book, is free of the complex data sets, regressions, equations, and multivariate analyses that define academic policy writing that no peasant (or nonacademic, for that matter) would read, it nonetheless bears chapter headings such as “Community, the Environment, and the ‘Non-Sexist City'” that will sharply limit its audience.</p>
<p>In relentlessly listing dozens upon dozens of examples of what he sees as the future alive today -- from employee stock ownership plans (ESOPs) and community-development corporations to “publicly accountable enterprises,” community land trusts, and the like -- Alperovitz insists that he is “no utopian” and indeed “tough-minded.” Some of the efforts he mentions are significant. There are, for example, now roughly 11,000 ESOPs, with assets greater than $400 billion. Individual programs such as the Bedford-Stuyvesant Restoration Corporation, set up with the help of Robert Kennedy, have strong track records. And given that Americans now work more hours than even the Japanese, some sort of work-hour reduction system deserves serious consideration.</p>
<p>But, despite his claims of tough-mindedness, not only are Alperovitz's ideas far from authentic large-scale adoption; he is also too often willing to downplay their complex and sometimes quite disappointing results. His discussion of worker ownership, for example, skips past the bankruptcies of United Airlines and myriad troubles of Wierton Steel, the sometimes worker-unfriendly investment habits of public-sector and union pension funds, the declining fortunes of municipal utilities, or the fact that many of the innovative programs on his long list serve only a handful of people, often nearly invisibly. That in turn leaves him somewhat anxiously -- though proudly, even defiantly -- declaring to skeptics that his heroes are the forgotten men and women who fought for civil rights in the 1930s and '40s, doing “the real work” that led to the victories of the '50s and '60s. But though it may be a consoling thought, to suggest that his “America beyond capitalism” might be just decades away scarcely seems tough-minded.</p>
<p>Further underscoring his determination that this book be an affirmation of policy ideals more than a tactical manual for politics, Alperovitz does little more than mention in passing “globalization” (admittedly by now a hateful cliché, but at least a useful portmanteau); nor, just as discouragingly, does he speak of the Democratic Party. He does say he favors localism and regionalism as partial antidotes to the former, and “democracy with a small d” (a k a “democracy from the ground up”) for the latter. But he never really says what he thinks of the “Big D,” its problems (let's not get started), or quite how, if “little d” ever really got going, it could be grown to a federal scale. </p>
<p>Gene Sperling has no problem taking up either globalization or the Democratic Party question; in fact, they are in some ways the heart and soul of <i>The Pro-Growth Progressive</i> and thereby produce a decidedly different set of recommendations for our future. The author spent four years as head of the National Economic Council, that Clintonian invention meant to put economic policy on the same level as the National Security Council's foreign-policy portfolio. Sperling is unquestionably bright, and since leaving the White House five years ago has shuttled among the Center for American Progress, the Progressive Policy Institute, and the Council on Foreign Relations -- and to judge from this book, is visibly eager to re-enter public service in the next Democratic administration.</p>
<p>The 1990s are to Sperling, who is 20 years younger than Alperovitz, what the 1960s seem to have been to the latter: that crystallizing moment in early adulthood when larger worldviews first mature. Alperovitz counts revisionist historian William Appleman Williams and radical economist Joan Robinson as personal mentors; Sperling, a college tennis star whose grades got him to Yale Law at the height of the Reagan era, not surprisingly counts three Yalies -- Robert Reich, and Bill and Hillary Clinton -- as his. It was through that network that Sperling entered the 1992 campaign, and then the White House. Once there, however, he quickly gravitated to “the other Bob” (Rubin, not Reich), thereafter becoming a stalwart of the “deficit-reduction-first” camp, through which he steadily rose in power. And from those eight years, Sperling, not surprisingly, has absorbed a straightforward lesson: Deficit reduction and Clintonomics “worked,” and Clintonian, Third Way politics must -- and will -- be the future of the Democratic Party and the nation.</p>
<p>The book thus starts, much in the manner of Thomas Friedman and Jagdish Bhagwati, by making globalization inescapable. Hence, the duty of the Democratic Party is to prepare its constituency for constant change and intensive competition. The fact that there will be real losers as well as winners in this new world means to Sperling that “the Dynamism Economy” -- driven by global capitalism and modulated but not really profoundly shaped by government -- will determine who's who in that race. To be sure, Sperling sees an affirmative role for government (he is, after all, a Democrat), but in place of the values of the New Deal, New Frontier, and Great Society, he offers a new social compact built on three not-so-new, and far from New Deal, “progressive values.” To wit: “Economic Dignity for Those Who Take Responsibility for Their Lives,” “Opportunities for Upward Mobility,” and a “Fair Start” in life for all. One need only note the prepositional phrase qualifying “economic dignity,” the declaration of “opportunities for” but not “upward mobility” itself, and the sharply delimited claim for a “fair start” rather than “fair outcomes” to sense the shotgun marriage of progressivism and social Darwinism that this compact represents. With Sperling we're in the land of the Third Way.</p>
<p>In pursuit of his values, he then deploys dozens upon dozens of policy ideas -- almost every one floated or implemented on a small scale over the past 15 years, a blizzard of proposals in the best Clintonian tradition -- that leave one dazzled by their comprehensiveness, but with no confidence about which will work as proposals.</p>
<p>Sperling freely admits, for example, that many communities will be devastated by free trade, which he nonetheless favors as a sine qua non for “pro-growth progressives” (versus apparently “anti-growth” or “no-growth” progressives, whom he's a trifle slow in naming). But he then reassures us that “Dynamic Adjustment Zones” -- drawn from the ideas of Jesse Jackson and Charles Rangel as well as Jack Kemp and Dennis Hastert and equipped with “Rapid Preresponse Units,” “Preemptive Retraining Assistance,” and “Flexible Education Accounts” -- will serve to smooth the transition to a more prosperous future. Where the same free-trade policies produce pain for the Third World's poor, Sperling's bold vision is to promote “Universal Education,” including Western aid totaling $7 billion to $10 billion a year for the basic training of 2 billion to 3 billion children. </p>
<p>Here in some ways Alperovitz and Sperling seem twins, trying to overwhelm us by the sheer numbers and seeming novelty of their proposals, whatever the likelihood of their implementation in the current political environment or their proportionality to the magnitude of problems they're attempting to solve. And it's here that one is reminded most clearly that political victories for policies are won with headlines, not details.</p>
<p>That is not to say that Sperling's book lacks headlines; rather, they seem torn from yesterday's news. The final part of the book, for example, is taken up with a return to core Clintonian and Rubinesque themes: the reasons for “fiscal discipline,” and how to “fix” Social Security (rolling back some tax cuts, trimming some benefits, and introducing a 3-percent surtax on annual incomes greater than $200,000). Simultaneously, he calls for increasing private savings through what he calls a “Universal 401(k),” suspiciously similar to Clinton's old “USA Accounts,” which stalled and then died in Congress.</p>
<p>Although <i>The Pro-Growth Progressive</i> is clearly aimed at influencing domestic policy debates in the run-up to 2008, reading the book reminded me of Paul Krugman's tart phrase, “It all sounds so very 1999.” Something here is badly mistimed and off-kilter, but for reasons different from Alperovitz's difficulties in <i>America Beyond Capitalism</i>. For many who know Washington's small cadres of progressive policy folk, this seems too much an update of arguments that have gone on since the early 1990s between the Democratic Leadership Council (DLC) and more liberal policy intellectuals (like those affiliated with this magazine), a battle that is at its heart about the business-government balance, the inevitability of market-driven change, free versus fair trade, and the appropriate role of regulation.</p>
<p>Sperling -- who plants his feet in the DLC camps while extending his hand to his more liberal friends -- believes that the sheer fiscal madness of the Bush White House makes '90s-style fiscal discipline all the more necessary. But he is slow to sound alarms on the widening of inequality, and his pro-growth agenda doesn't really address that problem. Invoking John F. Kennedy's dictum that “a rising tide lifts all boats,” Sperling is quite open in insisting that Democrats must accept the reality that upper incomes will grow faster than middle and lower incomes -- and that that is all right, as long as the latter are growing, too. </p>
<p>This strategy “worked” in the '90s, though the boats of the bottom 90 percent rose only in the last four years before beaching once again since. But today there is no soaring stock market, underlying high-tech boom, or record-low unemployment. As I write, General Motors has made unprecedented cuts in its health-care program, and its parts supplier Delphi has demanded a reduction -- by two-thirds -- of its employees' wages. This follows on United and other airlines off-loading billions in pension liabilities, plus further announcements of outsourcing by telecoms and high-tech companies. And all of this is taking place as American corporations report record profit margins but negligible reinvestment in domestic plants and equipment. How Sperling's remedies cure these ailments never becomes clear.</p>
<p>Neither Alperovitz nor Sperling, therefore, makes good on his claims. Alperovitz expresses ideal ends that he unconvincingly defends as realistic because little seedlings can be seen about us. And Sperling has written an election-driven strategy manual reminding us that, like the proverbial generals, policy intellectuals are always preparing to fight the last war. Both books, for those willing to rummage through them, offer dozens of narrowly interesting ideas, but neither convinces us that the Rosetta stone of progressive economics -- a coherent, generous, farsighted, and electorally promising policy for Democrats -- has yet been found. </p>
<p><i>Richard Parker is the author of John Kenneth Galbraith: His Life, His Politics, His Economics. He teaches at the Harvard University's John F. Kennedy School of Government.</i></p>
</div></div></div>Sun, 20 Nov 2005 23:51:04 +0000145046 at http://prospect.orgRichard ParkerOn God and Democratshttp://prospect.org/article/god-and-democrats
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"> <p>Shortly before the 2000 presidential race started, Gertrude Himmelfarb, the aging Athena of neoconservatism, found herself struggling to express what she felt were the core values differences between Democrats and Republicans, liberals and conservatives. What she came up with was that America had become "one nation, two cultures." "One is religious, puritanical, family-centered, and somewhat conformist," wrote <i>The Economist</i> in describing her vision. "The other is tolerant, hedonistic, secular, predominantly single, and celebrates multiculturalism. These value judgments are the best predictor of political affiliation, far better than wealth or income."</p>
<p>
By the time the 2000 election was over, however -- even though Himmelfarb's candidate eventually won, with a little jurisprudential help -- her "two cultures" idea looked pretty poor as a description of what divides her friends from ours. True, just as she said, 91 percent of George W. Bush's voters had freely identified themselves as "religious" to pollsters -- but so had 81 percent of Al Gore's. And while Himmelfarb's reviled "seculars" did make up a fifth of Gore's support, they'd also been one in 10 of Bush's -- hardly the signs of a black-and-white divide. But when it comes to faith-and-politics issues, unfortunately for the talking classes, polarity has always been far too simple a frame.</p>
<p>
This year, religion is back in the news, and, not surprisingly, so are a lot of the same tired arguments -- on both sides of the political fence. Himmelfarb herself has been missing, but absent her presence, and facing a president who drives liberals insane by invoking the Almighty every chance he gets, many of those same liberals have been worriedly wondering what's going on as the Democratic candidates stumble over themselves and one another in what seems at times a hell-bent rush to assure voters that they've "got religion," too. What, some ask, has come of separation of church and state? Is this the end of tolerance? Is there a spiritual inquisition ahead? Salem witch trials, anyone?</p>
<p>
Just what sort of faith, and how much of it -- and how good that is for the Democrats and the country -- has not been an uncontroversial topic this season. Shortly after Christmas, <i>The New York Times</i>, for example, ran an op-ed by liberal evangelical preacher Jim Wallis, who chided that the Democrats running for president still weren't getting the issue right. He cited Howard Dean's admission, for one, that the former governor had quit being an Episcopalian to become a Congregationalist after the Episcopal diocese of Vermont refused to sell land for a lakeshore bike path. This struck Wallis as just the sort of "faith-lite" story that too many Americans associate with Democrats and God -- and a key reason why Democrats come off as so irreligious to many voters.</p>
<p>
Wallis' editorial provoked a rash of letters to the <i>Times</i> -- and must have prompted a conversation among the editors, because, less than two weeks later, they published an op-ed rejoinder of sorts, headlined "One Nation, Under Secularism." In it, former journalist Susan Jacoby warned darkly that "[i]n Campaign 2004, secularism has become a dirty word." Avoiding mention of Wallis by name, she, too, took aim at Dean -- not for his bike-path-provoked conversion but for telling Iowa voters that he prayed daily. Jacoby called the admission "comically opportunistic." The Democrats, it seems, can't catch a break on this issue from anyone this year.</p>
<p>
Bush, of course, shows no confusion of any kind about <i>his</i> God. It's the Democrats who take the beating -- from conservatives, naturally, but as the Wallis and Jacoby pieces (and hundred of others in the past several months) indicate, from a surprising array of liberals with very different agendas. In a year when Iraq and the economy top the list of matters most important to voters, type the words "religion and Democratic presidential candidates" into Google; the bounty retrieved seems to run the highway all the way to heaven itself. Go search Lexis-Nexis and the same thing happens. Little of it is complimentary.</p>
<p>
It should come as no surprise to anyone that religion is at play in American politics. Yet exactly which aspect of that vast subject is supposed to be up for grabs this year, why it's important, and what the Democratic candidates should be thinking or doing or saying about it (if anything) remains devilishly elusive.</p>
<p>
But there's a bottom line here that some might find surprising: Yes, the right wing will carry on about the Democrats being the party of the godless, and the media will serve as its amplifier. But at the end of day, a sizeable percentage of religious Americans -- the ones who tend not to make much noise or hanker for public demonstrations of devotion -- will vote Democratic anyway. </p>
<p>
This is not to say that Democrats still shouldn't think hard about what they're up against. Obviously the Iraq War and September 11 have played their unsettling roles here. As this unilateralist administration has charged headlong into not one but two wars -- wars it's insisted aren't about Islam but about terrorism -- it has convinced almost no one that's what it really means. After initial post-9-11 talk about the "crusade" America would lead against its satanic enemies, Bush backtracked, and, ever since, he and his administration have meticulously sworn that they see a huge difference between "Islamic fundamentalists" (always bad, it seems -- unlike, say, "Christian fundamentalists") and "Islam" (good, especially when it's the faith of key U.S. allies in the Middle East and Asia, not to mention a billion people on the planet and several hundred thousand Michigan voters). But that need to show tolerance and discernment after 9-11 eventually clashed with a new conflicting need: to stoke war fever over Iraq. And convincing Americans that invading Iraq was necessary has fed darker fears -- 44 percent, according to Pew polls, now think Islam itself promotes violence. Left alone, that sort of bias would constitute its own potential weapon of mass destruction in the days and years ahead.</p>
<p>
Foreign policy isn't the only source of political God talk nowadays. Bush's almost daily invocation of the deity -- brought up in relation to the war on terrorism, prison reform, the future of the family, gay marriage, or drug problems among pro athletes -- has been the other visible force driving religion to the top of the news this season. Stealing a page from Ronald Reagan (though notably not from Bush <i>père</i>), Bush <i>fils</i> has, rhetorically at least, made front-and-center faith a rallying cry in the GOP's ongoing home-front holy war against the Democrats, as well as its guarantor of ultimate victory in the terrorism wars abroad.</p>
<p>
Keenly aware that Republicans were once again grabbing the "faith thing" away from them, Democratic Party strategists this year, desperate to hold on to at least a competitive position on any issue they can, have urged their candidates to fight back, to make sure that voters know there's more than a letter's worth of difference between "G-O-D" and "G-O-P." Yet as the criticisms of Dean from sacred and secular Democrats alike suggest, and as the failed campaign of Joe Lieberman only underscores, knowing what voters who practice a faith that isn't hard-right evangelical want to hear about the faith issue is no easy trick.</p>
<p>
It's hard to start any discussion on religion and politics these days without someone pulling out the now familiar Gallup Poll data showing that for over half a century, more than 90 percent of Americans have said they believe in God. Somewhat more disquieting to some, America is also a "Christian" country -- in Gallup's terms, that is, of citizens' professed religious identity (practice remains another matter), because that's what more than 80 percent of Americans say they are. Yet given those astonishing levels of apparent homogeneity, after that, anything remotely approaching religious majoritarianism in America disappears -- and is why these two majoritarian facts about faith have long mattered far less than one might think.</p>
<p>
But then what <i>does</i> matter about religion in politics this presidential year? Here, as a starting place, are a few suggested themes worth thinking about:</p>
<p>
<b>1. The religious landscape does relate to voting behavior.</b> There are three big denominational blocs in America, each representing roughly a quarter of the population: Roman Catholics, mainline Protestants, and evangelical (or fundamentalist or Pentecostal) Protestants. When it comes to politics, the first bloc leans Democratic, the second leans Republican, and the third is, simply, Republican -- and proud of it. African-American Protestants are another 10 percent of the landscape, and while theologically evangelical, they're clearly far more Democratic than white evangelicals are Republican. Seculars make up more or less another tenth, and vote 2 to 1 Democratic, while among the remaining 5 percent to 8 percent of Americans, Mormons vote GOP, but Jews, other Christians, and other non-Christians all go Democratic. </p>
<p>
In 2000, Protestants made up 48 percent of Gore's vote; Catholics, 23 percent; seculars, 19 percent; and Jews and others, 10 percent. Bush's vote was 41 percent evangelical, 22 percent mainline Protestant, 21 percent Catholic, 11 percent secular, and 5 percent Jewish and others.</p>
<p>
<b>2. The geography of religion matters, but is not just about religion.</b> Evangelicals have historically concentrated in the South, with smaller populations in the Midwest, and their location -- no surprise -- tracks remarkably closely nowadays to the states where the GOP has won heavily in recent years. In the Northeast, the Southwest, and parts of the Great Lakes Midwest, Roman Catholics are the biggest bloc in most places -- and it's been these states that Democratic presidential candidates most often win, especially when African-American Protestant turnout has also been strong and mainline Protestants have been persuaded to tilt Democratic along with them.</p>
<p>
<b>3. Where is the Christian right?</b> For 20 years, first Jerry Falwell and his Moral Majority and then Pat Robertson and the Christian Coalition seemed everywhere, the scourge of liberals and liberal values, the embodiment of what the preachers bemoaned as "secular humanism." Yet the fact (not always noticed at dinner parties when secular or religious liberals gather) is that the Moral Majority has been nonexistent for 15 years (after going bankrupt), and that the Christian Coalition is almost gone now. Robertson resigned as its leader three years ago, Ralph Reed (its Machiavelli or Richelieu, depending on your taste) left well before that, and 90 percent of what was once the coalition's $26 million budget has gone with them. Robertson and Falwell, of course, still show up regularly on cable TV with their fire-breathing attacks on gays, feminists, and the general overall satanic perfidy of those whom they merely dislike. But it's not clear just who's paying serious attention to them. The Christian right exists now as a voting bloc within the Republican Party, but not as a successful separate group of extra-party organizations the two preachers can claim is still leading disillusioned southern Democrats to the promised conservative land. </p>
<p>
<b>4. The "compassionate conservative" conundrum of the GOP.</b> All of Bush's warm-and-fuzzy "faith-based" talk was designed to pull moderates toward him in 2000. But then and since, it has also served double duty as a way to manage the religious-right bloc that's so essential to the GOP's future (that is, where the media hear the "compassionate" part, other ears delight at the second word). Yet the new "compassionate conservatism" also represents an admission of a core set of intermingled paradoxes facing the GOP this year and beyond.</p>
<p>
By the late 1990s, after the collapse of both the Moral Majority and Christian Coalition, a surprising number of conservative evangelicals began openly questioning the full-bore politicization of their faith. They weren't less conservative, nor were they ready to jump the Republican ship. But as former Moral Majority Vice President Cal Thomas made clear in <i>Blinded by Might</i>, they felt badly used by Falwell, Robertson, and the GOP, which had never really delivered on the social issues that mattered most. Abortion was still legal, and twice as many were being performed as had been when <i>Roe v. Wade</i> was decided. Creationism wasn't making headway either, for all the ruckus they'd raised over it. After hundreds of school-board battles across the country, Kansas -- the only state willing to put it in the curriculum -- had reversed itself 18 months later. The school-prayer amendment drive, vigorous a decade earlier, was dead. And their ongoing, passionate campaign against gay rights -- the latest in a long list of ultimately failed evangelical enterprises -- was doing poorly, as legal, political, and social discrimination against homosexuals kept declining, even in the South. </p>
<p>
Candidate Bush in 2000 had promised to reverse all that, even as he packaged himself for the rest of America in the language of compassion. But look what's happened: The White House's much-heralded effort in 2001 to launch a new faith-based social-welfare system has been long on heat and low on light. It quickly turned out that most evangelical congregations weren't really interested in taking government grants -- and that their leaders were more concerned that competitors like the Nation of Islam or liberal Protestant groups never see a dime from the initiative. </p>
<p>
The result? The original bill has been bottled up in Congress for nearly three years. And in the White House itself, Bush's whole faith-based initiative has gotten little save rhetorical attention ever since John DiIulio, the president's first appointee to run the program, resigned his post and ripped into the backroom deals and blatant cynicism he found among the "Mayberry Machiavellis" inside the White House. Meanwhile, Bush's unwillingness to make his much-touted (but still unfunded) $15 billion global AIDS initiative contingent on teaching abstinence has further enraged supporters.</p>
<p>
Does this mean that the religious right inside the GOP is ready to bolt the party? Hardly -- in part because they've nowhere else to go. Bush adviser Karl Rove swears he's doing a massive voter-turnout drive among Christian rightists, and of course their enmity toward all things Democratic and liberal will drive some of them to the polls to stop Satan's march.</p>
<p>
But it does mean that there might yet be a "Dixiecan" revolt one day, akin to the 1948 "Dixiecrat" uprising led by Strom Thurmond that almost sank Harry Truman's re-election. And what about those Republican seculars who made up a crucial 10 percent of Bush's vote in 2000? How long will they choose to keep company with the demands that the religious right keeps placing on their shared party? Rove has no doubt been poring over the data on that critical question.</p>
<p>
<b>5. So where's the religious left to match the religious right?</b> It's a good question, with far from simple answers. To begin with, the fact that four out of five Gore voters in 2000 identified themselves as religious answers it -- they're voting for the Democratic candidate. But that's not quite the whole story, obviously. In 1960, John F. Kennedy was a Catholic candidate in a Protestant country that had a 300-year history of distrust for "rum, Romanism, and rebellion." So to overcome his "Al Smith problem," he set out the modern marker for what it means to be a liberal politician. Before a doubtful audience of ministers in Houston, Kennedy declared that faith was a private matter, and that if elected he would not let his religion determine his presidential decisions. </p>
<p>
It was a moment of triumph for secularism, it seemed, and for ecumenism -- and it led to the election of the first non-Protestant president in U.S. history. But the aftereffects were more complex. While his election convinced most American elites that the country had entered what the great Yale historian of religion Sydney Ahlstrom called "the post-Protestant era," American voters didn't quite get the message. Kennedy won because more than 80 percent of Catholics voted for him, while a majority of Protestants opted for Richard Nixon. Twenty years later, by the time Ronald Reagan sought the same office, the conservative southern wing of America's evangelical Protestants had had enough of the Democrats who succeeded Kennedy and of claims that faith was "private" -- and so began their now completed exodus to the GOP.</p>
<p>
Still, for liberal candidates, there is an immense audience of "faithful" Democrats (and many independents) who aren't looking for a religious left to match the religious right. Unlike evangelicals, they don't feel compelled to use religious tests to guide their voting: Only a quarter of mainliners and a third of Catholics say they frequently or occasionally use faith to determine how to vote (compared with nearly 70 percent of white evangelicals). </p>
<p>
The reasons for this are hardly new, unlike the triumph of private-faith or multicultural teaching. Well before the Civil War, the nation's largest Protestant denominations -- the Baptists, Methodists, and Presbyterians -- split over two issues: slavery and whether to read the Bible literally. The northerners opted to move toward a "civic religion" that rejected slavery and embraced science, industrial progress, and modernism; their southern colleagues went the other way. That freed the northerners to gradually restructure their faith from a purely denominational construct to one that maintained denominational identity while promoting a civic, governmental ideal in which the state was meant to help achieve John Winthrop's "City upon a Hill." The Social Gospel movement in the 1880s and '90s laid the groundwork for not only the Progressive Era but, soon enough, the New Deal as well. Tolerance, ecumenism, and multiculturalism (though a word of recent invention) were all foreseen then, more than a century ago. (Crucial to real ecumenism, American Catholics were embracing this view in the years just before Kennedy ran, and they accelerated their participation in light-year terms while Pope John XXIII was alive.)</p>
<p>
Today, just as there always has been, a religious left is alive in America -- easily seen in Martin Luther King Jr.'s legacy, in the Catholic bishops' remarkable critiques of nuclear arms and economic injustice at the height of the Reagan era, in the ongoing battles over domestic issues such as the "living wage" campaigns being fought across the country today (often led by religious coalitions), and most recently in the Episcopal Church's willingness to ordain an openly gay bishop.</p>
<p>
But religious-left opposition is also divided within itself. For example, the U.S. Conference of Catholic Bishops, which speaks for 60 million American Catholics, may find itself working alongside the National Council of Churches, which tries to speak for an almost equal number of more fractious progressive white and black Protestants (and Orthodox) on issues of economic justice or global security. Yet they part ways when it comes to the controversial God-and-body issues of abortion, homosexuality, birth control, and the like. No one has yet figured out how to heal those very real divisions. </p>
<p>
Even so, innumerable Washington-based organizations defend and promote religious tolerance, and many speak from a clearly religious commitment. Secular groups such as People For the American Way and the American Civil Liberties Union actively cooperate with multidenominational religious allies like The Interfaith Alliance and Americans United for Separation of Church and State, which, supported by hundreds of thousands of members, maintain a prominent profile in the nation's capital. At the same time, the Catholic bishops and the National Council of Churches -- and its member denominations -- use their own well-staffed Capitol Hill offices to keep watchful eyes on issues from the impact of Bush's tax cuts on the poor to the size of the defense budget to promoting alternatives to the administration's unilateralist foreign policy. </p>
<p>
The problem the religious left faces today, however, lies, ironically, in the crisis of modern Judaism, once the steadfast ally of these progressive Christians. Long distrustful of evangelical Christianity, a notable minority of American Jews -- thanks to evangelicals' rereading of the Book of Revelation, a New Testament portion that most liberal Christians simply ignore -- have begun flirting with an incongruous new alliance that's eating away at the heart of the nation's religious left. Stunningly, there's been a transformation from evangelicals' once commonplace anti-Semitism to a Semitophilicism of an extraordinary sort. In their reading of Revelation, for example, evangelical "premillenarians" have taken the creation of modern Israel as a sign from God that Christ's Second Coming -- and with it, the Final Judgment -- are now imminent. When that chiliastic moment arrives, though, Jews -- like all nonbelievers in Christ's redemptive role -- don't fare well in Revelation's vision. But no matter. What this has produced is an unholy alliance of convenience, in which Ariel Sharon and Benjamin Netanyahu have embraced the likes of Pat Robertson and Jerry Falwell as a means to win support for their policies, while for conservative evangelicals, a strong Israel is crucial to Revelation-inspired dreams. And for GOP strategists such as Ralph Reed and Karl Rove, it has meant the opportunity to coax Jewish support away from the Democrats -- or at least toward support for a much more conservative Democratic Party less resistant to the GOP's agenda.</p>
<p>
As this complicated, fractious, and always messy landscape suggests, American religion can't ever be fitted into boxes as neat as Himmelfarb's "two cultures." Alexis de Tocqueville, the old warhorse on religion and politics, gets trotted out often these days by conservatives who want to use him to support their version of American religiosity's ongoing importance. But Tocqueville never claimed to see any such thing; far from it, he saw the same complicated, fractious, messy landscape we see today. "I even doubt whether religious opinions have as much influence as one at first thinks," he wrote in a letter to a French friend. "The religious state of this people is perhaps the most curious thing ... it's evident that here, generally speaking, religion does not profoundly stir the souls." </p>
<p>
What Tocqueville did see was that "the immense majority have faith in the wisdom and good sense of human kind, <i>faith</i> in the doctrine of human perfectibility. ... They honestly believe in the excellence of the government which rules them; they believe in the wisdom of the masses provided they are enlightened. ... Will Deism ever be able to satisfy all classes, especially those which most need the rein of religion? I can't persuade myself of that. ... It's obvious there still remains here a greater foundation of Christianity than in any other country of the world to my knowledge, and I don't doubt but that this disposition still influences the political regime ... ." </p>
<p>
Still, Tocqueville warned in conclusion, too much could be made of the whole topic. "That's enough on this subject," he ended his letter, "toward which my imagination draws me continuously and which would end by making me mad if I plumbed it often ... ." It's advice still worth listening to today.</p>
</div></div></div>Fri, 05 Mar 2004 21:27:23 +0000143285 at http://prospect.orgRichard ParkerA General Theory of Keyneshttp://prospect.org/article/general-theory-keynes
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"> <blockquote><p>
<b>John Maynard Keynes: Fighting for Freedom, 1937-1946</b><br /><br /><br />
By Robert Skidelsky, Viking, 580 pages, $34.95.
</p></blockquote>
<p>
<span class="dropcap">J</span>ohn Maynard Keynes was an economist, a policy<br />
adviser to<br />
the British government (and, at times, a coruscating critic), an influential<br />
figure<br />
in the Liberal Party, an intimate member of the Bloomsbury Group, a prolific<br />
journalist of opinion, a patron of the arts, a gentleman farmer, a wealthy<br />
investor, a prominent business executive, a fixture of Cambridge University's<br />
intellectual life, and a homosexual who, in his early forties, married a Russian<br />
ballerina and lived thereafter (by all accounts) a deeply fulfilling life with<br />
her.</p>
<p>
In vividly portraying that very complexity, biographer Robert<br />
Skidelsky has given us a great gift and has enriched our knowledge of the<br />
varieties and subtleties of Keynes's genius. In three definitive volumes crafted<br />
over two decades, Skidelsky has become the master of Keynes's life, a life made<br />
all the more extraordinary because it spanned seven extraordinary decades --<br />
from<br />
the heyday of laissez-faire Victorian liberalism to the dawn of a post-World War<br />
II era that has since taken the name "Keynesian," at least in economics and<br />
public policy, as part of its very definition.</p>
<p>
In the first volume (<i>John Maynard Keynes: Hopes Betrayed, 1883-1920</i>),<br />
Skidelsky delved into the importance of Keynes's forebears and the influence of<br />
his father, Neville, a Cambridge University administrator who was a close friend<br />
of legendary economist Alfred Marshall. We see Keynes joining the Apostles, a<br />
semi-secret club of brilliant young men who gathered around Cambridge philosopher<br />
G.E. Moore. Keynes called Moore's <i>Principia Ethica</i> "the most important<br />
book I ever read"; it propelled him, throughout his life, to place his economic<br />
work in a larger quest for justice, ethics, and beauty. Moore's ideas led Keynes<br />
to the aesthetically and morally revolutionary world of the Bloomsbury Group, and<br />
to explore his own sexuality. More important to the rest of us, they undergirded<br />
his vision of human society and the role economics should play in it. </p>
<p>
In <i>John Maynard Keynes: the Economist as Savior, 1920-1936</i>,<br />
Skidelsky -- in sometimes daunting detail -- took the reader up to the creation<br />
and<br />
publication of Keynes's magnum opus, <i>The General Theory of Employment,<br />
Interest and Money</i>. Had Keynes died immediately after its appearance -- which<br />
he almost did, from a stroke -- his place in modern history would have been<br />
assured<br />
thanks to that one book. </p>
<p>
It is impossible to overstate the influence of <i>The General Theory</i>. Its<br />
central idea -- that government is not only <i>capable</i> of managing modern<br />
capitalism's roller-coaster ride of business cycles but is <i>obliged</i><br />
to -- governed post-World War II economic policy in the Anglo-American world. It<br />
led to new styles of economics, the most famous here in America being the<br />
"neoclassical synthesis" led by MIT's Paul Samuelson. In the 1970s, that brand of<br />
Keynesianism faltered and came under ferocious conservative attack, both as<br />
theory and policy. Yet there has been no successor, only passing rebuttals. By<br />
the 1990s, as Paul Krugman, Alan Blinder, and many other economists have argued,<br />
Keynesianism -- even when some hesitated to use the word -- was once again not<br />
only<br />
alive but thriving.</p>
<p>
Keynes lived for a decade after <i>The General Theory</i>'s appearance, and<br />
those years, 1937 to 1946, are the subject of Skidelsky's just-published final<br />
volume. For all of us today, it is a good thing that Keynes lived on. He played a<br />
vital role in disseminating <i>The General Theory</i>'s key ideas. No less<br />
important, he went on to write <i>How to Pay for the War</i>, a smaller but in<br />
some ways almost equally influential work. Here he explained how government<br />
should<br />
manage markets when an economy is straining the limits of its productive<br />
capacities, as Western economies were in World War II. He sketched<br />
"full-employment budgeting" for the first time and, using back-of-the-envelope<br />
numbers (almost literally), showed economists how to forecast the gap between<br />
actual GNP and what it could be with full employment, a technique that became the<br />
stock-in-trade of liberal Keynesians thereafter. His supreme contribution before<br />
his death, however, was in helping create the World Bank and the International<br />
Monetary Fund (IMF) as part of the 1944 Bretton Woods agreement. </p>
<p>
Many on the contemporary left, and some on the right, would take exception to<br />
describing the creation of the World Bank and IMF as a contribution. Liberals<br />
dislike those multilateral agencies largely for the "structural-adjustment<br />
policies" they began imposing on the third world after the OPEC price hikes of<br />
the 1970s, which led to a great global lending spree and the 1980s global debt<br />
crisis. Since then, we've seen repeated, rolling financial crises across the<br />
globe, right up to Argentina's bankruptcy late last year, the largest national<br />
bankruptcy to date. </p>
<p>
But the structural-adjustment programs adopted in the Reagan-Thatcher era were<br />
at odds with Keynes's vision. His own designs for the World Bank and IMF were<br />
decidedly more friendly to the poor and the indebted than to wealthy creditors.<br />
He wanted the two new multilateral agencies -- largely free of domination by the<br />
United States or anyone else -- to serve as "global banks" and "global<br />
treasuries."<br />
At the same time, he wanted them to be able to issue their own "currency" (called<br />
the "bancor") in order to provide liquidity in times of crisis and for long-term<br />
growth, and to do so at levels beyond those that private capital markets would<br />
provide. In Keynes's plan, moreover, exchange rates were to be managed by<br />
governments, not 28-year-old traders staring at computer screens; commodity<br />
prices were to be stabilized by publicly controlled buffer stocks; and trade<br />
policy was to be shaped by domestic concerns for equality, democratic<br />
sovereignty, and stable growth, not by a free-trade-whatever-the-cost ideology.<br />
His model was, in essence, a generously liberal version of domestic Keynesianism,<br />
rewritten for the world.</p>
<p><span class="dropcap">S</span>kidelsky's new volume details the development of<br />
Keynes's ideas<br />
leading up to Bretton Woods and then the co-optation/defeat of those ideas by the<br />
Americans (the judgment here is not simple, or binary, or at times even clear).<br />
Most of us today forget (or never knew) that, even before Pearl Harbor, political<br />
and economic leaders in London, Washington, and New York had begun planning the<br />
terms of a new post-war world. Skidelsky reveals the competing currents of<br />
British and American economic policy during the war, from the creation of<br />
Lend-Lease in 1940 forward -- and the ambitions both sides held. Britain had long<br />
prospered under a system that extolled "free trade" but that was built, in no<br />
small part, on "imperial preferences," and that was anything but free to outside<br />
competitors such as the United States. Beginning early in the twentieth century,<br />
America -- which had thoroughly rejected free trade for most of its own<br />
history -- began chafing at English trade barriers. But until World War II,<br />
Washington had never been in a position to change London's rules governing global<br />
trade and finance.</p>
<p>
The war brought the divergent interests and ambitions of the two<br />
Allies to a head, even as it brought them together militarily. As America and<br />
Britain fought the war, they also waged a second-front battle, using pens and<br />
policy memos, over which of the two would dominate the world, economically and<br />
politically, when the Axis powers were defeated. The struggle played out via<br />
Lend-Lease (which put Britain deeply in debt to America), then through U.S.<br />
Treasury official Harry Dexter White's "American Plan" at Bretton Woods (which<br />
inordinately favored the dollar over the pound as the post-war medium of trade<br />
and finance), and then thanks to the seemingly generous post-war loan America<br />
granted Britain. (I say <i>seemingly</i> generous because the United States had<br />
insisted on convertibility of the pound as a lending condition -- and thus<br />
guaranteed that the money Washington lent London's first-ever Labour government<br />
almost immediately rushed back to New York banks.) From this now-long-forgotten<br />
struggle with its closest ally, America emerged victorious. </p>
<p>
That said, Skidelsky goes to great pains to stress the fundamental commonality<br />
of Anglo-American interests, both during World War II and now. He also shows that<br />
Keynes seldom wavered in his affection for America or in his faith that the two<br />
nations would eventually find a high common ground. In this, Keynes (unlike<br />
Churchill and most others in Britain's wartime cabinet) was not seeking simply to<br />
restore Anglo-imperial relationships and global economic hegemony. Keynes's<br />
liberalism was never narrowly nationalist on either score. Yet Skidelsky, as a<br />
British historian writing about a British economist, understands what was at<br />
stake and does not doubt that Keynes's plan was superior for Britain's long-term<br />
interests. Indeed, this volume's British edition title is not "Fighting for<br />
Freedom" but "Fighting for Britain." The British vantage point is, in one sense,<br />
proper and even essential. Skidelsky's masterful work reminds us just how<br />
thoroughly English his subject was. Anyone who doubts this should look at how<br />
Keynes treated his tenant farmers in his role as local squire, or how he reacted<br />
to his wartime ennoblement as Lord Keynes of Tilton, and the letters to his<br />
mother weighing his choice of title.</p>
<p>
For American readers, though, this vantage point leaves gaping and troubling<br />
holes in the narrative. Consider that Harvard's Alvin Hansen, who was Keynes's<br />
towering American apostle, rates here only one brief mention. The critical<br />
wartime role played by a young John Kenneth Galbraith in promoting Keynes to the<br />
country's most powerful businessmen while Galbraith was senior editor at<br /><i>Fortune</i> isn't mentioned at all. The mid-war emergence of the Committee for<br />
Economic Development (CED), which promulgated a cautious, even conservative,<br />
brand of Keynesianism that proved highly influential in the 1950s, likewise is<br />
ignored. Paul Samuelson -- whose Harvard doctoral thesis became the Magna Carta<br />
of<br />
the neo-classical synthesis when it appeared shortly after the war as<br /><i>Foundations of Economic Analysis</i> -- is entirely absent. So, too, is the<br />
fight<br />
over the Full Employment Act of 1945, that classic piece of Keynesian policy<br />
making that was reduced to something much less as the Employment Act of 1946.</p>
<p>
Skidelsky shows a less well-rounded feel for several of the principal American<br />
officials he does portray than he does for their British counterparts. And what's<br />
worse, Skidelsky's handling of Franklin Roosevelt and Treasury Secretary Henry<br />
Morgenthau fails to convey the authentic capacities and visions of both men<br />
(though, in fairness, here Skidelsky follows Keynes's own private evaluations).<br />
It's Harry Dexter White who gets the most attention -- and with good narrative<br />
reason, since it is the prolonged Bretton Woods contest between Keynes and White<br />
that personifies the Anglo-American economic contest at the heart of this volume.<br />
But White is, even today, a complex and haunting enigma. Formally accused after<br />
the war of being a Soviet agent, White was called before a congressional<br />
committee and vehemently denied the charges. He died of a heart attack days<br />
later. Several years ago, thanks to release of the Venona files --<br />
long-classified<br />
U.S. intercepts of wartime Soviet cable traffic -- the charges against White<br />
resurfaced, and there has been a grim back-and-forth battle ever since over<br />
White's guilt or innocence.</p>
<p>
All this is no doubt relevant, but Skidelsky doesn't explain precisely why. It<br />
is hard to see what advantage Moscow might have gained from White's Bretton Woods<br />
victory over Keynes -- especially because the Soviets, after attending Bretton<br />
Woods, refused to become a signatory to "the American Plan" that White devised.<br />
Skidelsky is convinced that the Russian-Jewish White (né Weit) was somehow<br />
devoted to aligning the interests of the Soviets and the Americans against the<br />
British and their empire. What he misses is that the whole wartime issue of<br />
senior New Dealers sharing information with Communists and their<br />
sympathizers -- and in some cases directly with Soviet representatives whom they<br />
may or may not have known were intelligence officers -- is still fraught with<br />
more<br />
complexity and nuance than most of us who grew up during the Cold War can<br />
imagine. </p>
<p>
FDR himself, to give one amazing example, sent "Wild Bill" Donovan, his Office<br />
of Strategic Services (the OSS was the CIA's wartime predecessor) chief to Moscow<br />
in 1944 to return a Soviet code book that had fallen into U.S. hands. Donovan's<br />
mission was part of FDR's wartime strategy to lure Stalin out of his distrust<br />
(not least of the British) and his isolation, and into what Roosevelt hoped would<br />
be a world where greater trade and the freer exchange of ideas would guard<br />
against the conditions that led to World War II. This was, after all, a<br />
generation haunted by the failures of the 1919 Versailles Peace Conference. What<br />
happened at Bretton Woods is not explained by White's intentions or allegiances,<br />
but by American suspicions toward Britain that were two centuries old by then.<br />
That is in addition to the American belief that a democratic and prosperous<br />
world, shorn of European rivalries and European domination, lay ahead if only<br />
this time America did not retreat from its new global obligations. As Roosevelt<br />
once said, he had no intention of seeing America keep playing "the tail on the<br />
British kite."</p>
<p>
<span class="dropcap">B</span>ut why does Skidelsky so often seem to miss or<br />
misjudge the<br />
subtle currents, and complex personalities and interests, on the American side at<br />
this extraordinary moment when global economic rules were being profoundly<br />
redefined? It may be because he is not only a British historian but a<br />
conservative<br />
one. Though his title is missing from the book jacket, he is Lord Skidelsky of<br />
Tilton, a Conservative-appointed life peer and a deep admirer of Margaret<br />
Thatcher's economic programs. For a time he even served as the Conservative<br />
Party's official chief spokesman in the Lords on financial affairs; and he lists<br />
privatization of education among the long list of "de-collectivization"<br />
strategies he favors. (Though to complicate easy pigeonholing, Skidelsky recently<br />
became an English James Jeffords, angrily leaving the Conservative Party in<br />
disgust with its phobias about the European community.)</p>
<p>
Skidelsky's later chapters in particular show how he would have us<br />
ultimately understand Keynes: as a youthful, rebellious "outsider" from the<br />
British ruling classes who nonetheless embraced his mature membership in the<br />
establishment; as a critic of inequality who nonetheless died worth $20 million<br />
(in today's dollars) and as an economist who subverted the assumptions of<br />
neoclassical economics yet could, in private correspondence, fulsomely praise<br />
Friedrich von Hayek, that paragon of libertarian conservatism. In Skidelsky's<br />
narrative, Keynes was a prodigal son who came home to the British establishment<br />
and whose promotion of "the Middle Way" is today reflected in neoconservative<br />
(and<br />
neoliberal) policy on both sides of the Atlantic.</p>
<p>
Is that who Keynes really was? To many of us, Keynes and Keynesianism<br />
represent the apotheosis of modern liberalism in economics. This is a view shared<br />
by Galbraith and Samuelson, as well as by Milton Friedman (and Hayek, too, in his<br />
time). But it is somehow not so apparent to Skidelsky, who thinks such a view is<br />
in need of correction. This matter of "correcting" our understanding of Keynes is<br />
never without its consequences, or agendas. Once Richard Nixon, in 1971, declared<br />
himself a Keynesian, we should have foreseen the troubles ahead. Such troubles<br />
were fully realized when Ronald Reagan began likening himself to FDR and Reagan's<br />
economists began claiming that their supply-side tax policies were simply<br />
following the Keynesian model of the 1964 Kennedy-Johnson tax cuts (when in fact<br />
they were all about, in David Stockman's inimitable phrase, "hogs feeding at the<br />
trough"). Even <i>The Economist, </i>which despite its dislike of Keynesians<br />
should have known better, began referring in the mid-1980s to Ronald Reagan's<br />
huge deficits as "turbo-charged Keynesianism." They weren't that; they were the<br />
massive, purposeless results of bad conservative policy. </p>
<p>
There have always been conservative, moderate, liberal, and radical<br />
Keynesians, and in recent years so-called neo-Keynesians and post-Keynesians have<br />
been added to the mix. In the United States, as early as World War II, the CED<br />
represented a moderate, mainly Republican "business" Keynesianism. Its views were<br />
strikingly different than those of Alvin Hansen, or John Kenneth Galbraith, or<br />
Abba Lerner. Under Eisenhower, this CED Keynesianism led to support for the<br />
minimally Keynesian "automatic stabilizer" approach to business cycles, a far cry<br />
from the fuller-blooded Keynesianism of the activist "fine tuners" in the<br />
Kennedy-Johnson era. But it took Richard Nixon to do the most damage to the<br />
liberal legacy of Keynes's teachings.</p>
<p>
In the midst of stagflation and the soaring energy prices that followed the<br />
"Keynesian" Nixon's jettisoning of the Bretton Woods agreements, the<br />
government-business-labor concordat that made both conservative and liberal<br />
Keynesianism possible, collapsed. Ever since, America and Britain have been in<br />
search of new economic credos to follow, almost all of them decidedly<br />
un-Keynesian, if not anti-Keynesian. Now that we've seen the failures of<br />
monetarism, of the rational expectations school, of supply-side economics, and of<br />
old-fashioned GOP tax breaks for the rich, one might have thought that revisiting<br />
Keynes's teachings would be high on the agenda, at least of liberals. But it<br />
hasn't been. </p>
<p>
Were Keynes today to pay an unexpected visit to review the economic policies<br />
of Bill Clinton or Tony Blair, he would be hard-pressed to see anything Keynesian<br />
in their essences. (And he would need no substantial review before dismissing the<br />
policies of Thatcher, Reagan, or the Bushes.) He would see parsimonious caution<br />
in our era's neoliberal policies, not the authentic liberalism, the generous<br />
vision, and the bold practice with which Keynes sought to design economic theory<br />
and shape policy. </p>
<p>
Keynes's goal today wouldn't be to oversee the end of "big government" or to<br />
make government the handmaiden of markets. He wanted to see governments oversee<br />
and influence markets to free all of us, around the world, from as much toil as<br />
possible. Men and women were not meant to be put on a lifelong treadmill of work<br />
for the sake of aggregate economic growth and ever greater productivity. He<br />
envisioned a world in which people could cultivate themselves through increased<br />
leisure, greater access to the arts, and everything concerned with the spirit.<br />
Economists, in such a world, would not exactly wither away, he said, but would<br />
become "like dentists," serving a useful but hardly central function in a good<br />
society. </p>
<p>
In this, Keynes was as Rooseveltian as Roosevelt -- perhaps even more so. He had<br />
been no less appalled by the failures of Versailles, and he loathed the<br />
tight-fisted, anti-democratic and anti-egalitarian conservatism of economic<br />
theory<br />
and policy in the years after World War I. The purpose behind <i>The General<br />
Theory</i> and his Bretton Woods design alike stands far removed from<br />
Reagan-Thatcher-Bush conservatism <i>and</i> the neo-liberalism of Clinton and<br />
Blair on domestic and international economics.</p>
<p>
<span class="dropcap">T</span>o any who doubt this after reading Skidelsky, it is<br />
worth<br />
looking up Keynes's lengthy reply to a letter from the archbishop of York during<br />
World War II. Here Keynes affirmed the central role of liberal ethics in<br />
economics -- and urged the progressive archbishop to speak out forcefully on<br />
issues<br />
of economic and social justice. This was, after all, an economist who, on a<br />
different occasion, had said modern capitalism was "absolutely irreligious, and<br />
without internal union, without much public spirit, often, though not always, a<br />
mere congeries of possessors and pursuers," and who cursed "the hag-ridden"<br />
worship of "the money-motive." </p>
<p>
Keynes instead foresaw a time when "the love of money as a possession -- as<br />
distinguished from the love of money as a means to the enjoyments<br />
and realities of life -- will be recognized for what it is, a somewhat disgusting<br />
morbidity, one of those semi-criminal, semi-pathological propensities which one<br />
hands over with a shudder to the specialists in mental disease." Keynes was just<br />
as unambiguous about the role we could expect of conservatives in helping reach<br />
such a world: "Conservatism leads nowhere; it satisfies no ideal; it conforms to<br />
no intellectual standard; it is not even safe, or calculated to preserve from<br />
spoilers that degree of civilisation which we have already attained." </p>
<p>
Moreover, he left no doubt about how their resistance to liberal reforms ought<br />
to be addressed. "There is no reason," he wrote, "why we should not feel<br />
ourselves free to be bold, to be open, to experiment, to take action, to try the<br />
possibility of things. And over against us, standing in the path, there is<br />
nothing but a few old gentlemen tightly buttoned up in their frock coats, who<br />
only need to be treated with a little friendly disrespect and bowled over like<br />
ninepins."</p>
<p>
Skidelsky, exhaustively attentive to detail in other matters, omits mention of<br />
Keynes's correspondence with the archbishop. One wonders what the author might<br />
have made of it, for it underscores this lapidary fact: Keynes was many things,<br />
but never a conservative. In this, Skidelsky, for all his other contributions to<br />
our understanding of Keynes's life and thought, has failed us. Despite his<br />
revisionism (and the warmth with which it's been received in some circles), no<br />
amount of effort can do the impossible: turn the silk purse that was John Maynard<br />
Keynes, the genius of modern economics, into a conservative sow's ear.</p>
<p> </p></div></div></div>Wed, 17 Apr 2002 21:53:36 +0000142545 at http://prospect.orgRichard ParkerProgressive Politics and, uh, ...Godhttp://prospect.org/article/progressive-politics-and-uh-god
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"> <p>When I tell politically progressive friends that I've started teaching a course at Harvard about religion's impact on American politics and public policy, I usually face one of two responses.&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>The first is an awkward silence--and a quick change of subject. The second is also awkward but comes with an anxiously knowing, usually sotto voce, "So you're doing abortion and the Christian right--that sort of thing, yes?" When I explain that, no, in fact I'm devoting only a week of the course to the religious right and that I barely mention abortion, it's usually back to awkward silence again--and the search for a new subject.&#13;</p>
<p>&#13;<br />
&#13;<br />
In the right mood, I'm sympathetic to my friends' reactions. After all, what comes to mind when someone mentions religion and politics nowadays? Aren't Jerry Falwell, Pat Robertson, Gary Bauer, anti-abortion picketers, and antigay marchers probably the first images? Or is it perhaps Bill Clinton, lachrymose at a Washington prayer breakfast last year, earnestly "repenting" his affair with Monica? More recently, what about the House Republicans voting that schools post the Ten Commandments in answer to gun violence? Or the discomforting sudden embrace of religion by this year's crop of presidential candidates and their minions?&#13;</p>
<p>&#13;<br />
&#13;<br />
It's not a list designed to warm progressive hearts. But as I've come to discover, it's far from all we need to know or care about American religion. Contrary to what many may think, religion is alive and well in America--and a good deal of what it says and does is strikingly progressive.&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>&#13;</p>
<p>&#13;<br />
&#13;<br />
Of course, religion has been ever present in American life. Alexis de Tocqueville was hardly the first to point to its centrality to our civic life and politics, and even Karl Marx saw we were unique in this respect. "America," he wrote, "is pre-eminently the country of religiosity," with, he admitted, "a fresh and vigorous vitality."&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>No one who reflects even for a moment on abolition, suffrage, temperance, the Progressive era, or various utopian, labor, and reform movements--or, more recently, on civil rights, the Vietnam era, or the 1980s' battles over Central America and nuclear weapons--can miss the vital role of religious leaders, visions, and communities in each of these transformative struggles. &#13;</p>
<p>&#13;<br />
&#13;<br />
But what about today? &#13;</p>
<p>&#13;<br />
&#13;<br />
Here's what surprises a lot of my progressive friends: &#13;<br />
&#13;<br />
&#13;</p>
<p>&#13;<br />
In Los Angeles, you'll find the progressive religious tradition alive in Clergy and Laity United for Economic Justice (CLUE), a coalition of ministers, priests, and rabbis that proved decisive in getting the city's landmark living-wage ordinance passed in 1997.&#13;</p>
<p>&#13;<br />
&#13;<br />
Since then, CLUE has been working with local labor unions to organize low-wage workers in hotels, airports, and restaurants. Last spring CLUE won local celebrity--and a key victory for workers at posh L.A. hotels--by organizing a march down Beverly Hills' Rodeo Drive in the midst of Easter week and Passover. As bystanders gaped from behind the store windows of Fendi, Armani, and the like, 150 rabbis, Catholic priests, and Protestant ministers in full flowing robes filed down the street. At the head of the procession, they carried a 25-foot-long banner declaring "ALL RELIGIONS BELIEVE IN JUSTICE." "Shoppers froze in their tracks," one participant remembers, and local TV and radio crews converged on the scene. The procession stopped first in front of two hotels that had agreed, after a long struggle, to sign the new union contract. Here they deposited bowls filled with milk and honey--biblical symbols of the promised land--along with baskets of Easter lilies. But to a hotel that refused to sign the new contract, they instead brought bitter herbs, the Passover symbol of slavery. Within three weeks, all the targeted hotels signed hefty new contracts with their workers.&#13;</p>
<p>&#13;<br />
&#13;<br />
You'll find that same sort of dynamism in the Greater Boston Interfaith Organization (GBIO). At its founding meeting last year, nearly 5,000 people heard inner-city black Pentecostal ministers, suburban Unitarian and Episcopalian clergy, a rabbi, an imam, and Boston's Archbishop Bernard Cardinal Law, all preaching a new era of multiracial, multi-ethnic, faith-led urban renewal. Nearly 100 congregations, union locals, and community groups have now begun working together to improve low-income housing, city schools, and job conditions for new immigrants.&#13;</p>
<p>&#13;<br />
&#13;<br />
In Washington, D.C., a progressive evangelical group called Sojourners regularly challenges conservative evangelicals onissues ranging from income, gender, and racial equality to support for organized labor and the environment. Four years ago, the group--which had existed for a quarter of a century--launched an organizing project named Call to Renewal. Across the country, Call to Renewal has come into dozens of communities at the invitation of local church groups (and even politicians) to stop gang violence, foster urbanrenewal, help secure jobs for minority youth, and fight drug abuse. Evangelicals have a long tradition of concern for the poor, notes the Reverend Emory Searcy, national field organizer for the group. But to Searcy, a black Baptist minister, too many evangelicals "got hijacked by the right" in recent years. "We're just asking them to recapture their own history." &#13;</p>
<p>&#13;<br />
&#13;<br />
Over on Capitol Hill, as part of an international, multidenominational campaign, the religious alliance Jubilee 2000/USA is pressing Congress to cancel the foreign debts of the world's poorest countries. The group takes its name from the Old Testament example of the Jubilee Year, when debts were to be forgiven and slaves set free. It is endorsed by an impressive list of prominent religious leaders including Pope John Paul II and South Africa's Archbishop Desmond Tutu. Jubilee 2000/USA has also reached out to add endorsements from the AFL-CIO and the U.S. Conference of Mayors. The Jubilee 2000/USA movement was highly visible and influential in the recent Seattle WTO protests. &#13;</p>
<p>&#13;<br />
&#13;<br />
Working out of offices at the Cathedral of St. John the Divine on New York's Upper West Side, the National Religious Partnership for the Environment (NRPE) has been pressing churches and synagogues to take up global warming, toxic pollution, rain forest destruction, and ecological sustainability as part of their everyday ministry. And not just by "having guys with collars at a press conference," insists Paul Gorman, the group's director. With $10 million from the Pew Charitable Trusts, Nathan Cummings, MacArthur, and other foundations, NRPE is trying to make each denomination's teachings about the environment integral to what is preached from its pulpits, what is taught in its Sunday schools and seminaries, and what guides its institutional behavior. (One of the group's offshoots, for example, is an organization that helps churches buy electricity from environmentally sound sources, in states that are deregulating it. With sly humor, the group calls itself Episcopal Power and Light.) &#13;</p>
<p>&#13;<br />
&#13;<br />
Not far away, over in East Brooklyn, a number of mostly black and Hispanic activist ministers and laypeople working together as the Nehemiah Project have raised millions in loans from their local churches and national denominations to build or rehabilitate nearly 5,000 units of low-income housing over the past 15 years. The group's success is now being copied by new Nehemiah Projects in other cities around the country.&#13;</p>
<p>&#13;<br />
&#13;<br />
Faith-based groups from Delaware to Georgia are helping to organize thousands of mainly black and Latino workers in the enormous, low-wage poultry-processing industry. This is an industry, according to the Department of Labor, in which 60 percent of plants regularly violate wage and hour laws and workers who try to join unions are routinely harassed or fired. Working together as the Poultry Justice Alliance, these groups use well-publicized local rallies and prayer vigils (as well as lobbying pressure brought by their national denominations) to help the industry's workers secure basic labor rights. The Poultry Justice Alliance, in turn, is just one of nearly four dozen local faith-based groups in 25 states that coordinate their efforts on behalf of workers in sweatshops, nursing homes, and the hotel industry through the Chicago-based National Interfaith Committee for Worker Justice. &#13;</p>
<p>&#13;<br />
&#13;<br />
America's Catholic bishops--mainly through their Catholic Campaign for Human Development--contribute between $10 million and $20 million a year to grass-roots progressive groups around the country, working on everything from inner-city community renewal in Chicago to tenant organizing in California. And millions more flow each year from Catholic orders like the Maryknolls and Jesuits as well as mainline Protestant denominations and liberal Jewish groups. One guidebook for progressive activists, for example, lists nearly eight dozen major religious funding sources that might support their work.&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>In short, there's a great deal going on in America's religious life that liberals should know more about--and support. Yet the fact is we often do neither.&#13;<br />
&#13;<br />
&#13;</p>
<p><font color="darkred"><b>God and Country</b></font>&#13;<br />
&#13;<br />
&#13;</p>
<p>Garry Wills thinks that the ignorance of liberals and intellectuals generally about American religion reflects a deeper blindness. In <i>Under God</i>, he's blunt about his views:&#13;<br />
&#13;<br />
&#13;</p>
<p>&#13;<br />
&#13;<br /></p><blockquote>The learned have their superstitions, prominent among them a belief that superstition is evaporating... . Every time religiosity catches the attention of intellectuals, it is as if a shooting star has appeared in the sky. One could hardly guess, from this, that nothing has been more stable in our history, nothing less budgeable, than religious belief and practice.&#13;<br /></blockquote>&#13;<br />
&#13;<br />
&#13;
<p>&#13;<br />
The charge has a decided edge to it, but if you look at Gallup's nearly half a century of polling data about Americans and religion, it's not hard to see why Wills feels the way he does. According to Gallup:&#13;<br />
&#13;</p>
<ul>&#13;<br /><li>Nine out of 10 Americans say they've never doubted the existence of God.&#13;<br /></li><li>Eight out of 10 Americans believe they'll be called before God on Judgment Day to answer for their sins.&#13;
</li><li>Seven in 10 say they're current church or synagogue members.&#13;
</li><li>Four in 10 say they worship at least weekly (six in 10 say at least monthly) as members of a religious congregation.&#13;
</li></ul><p>&#13;<br />
&#13;</p>
<p>All this cuts against the confident belief many once held that religion in the United States was in terminal decline, thanks to the secularizing forces of urbanization, industrialization, scientific explanation, and consumer culture. &#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>To be sure, the 1960s and 1970s saw a drop in America's religious membership as part of a general decline of confidence and participation in civil society, which Robert Putnam has described, with some alarm, as a loss of the nation's "social capital." &#13;</p>
<p>&#13;<br />
&#13;<br />
Mainline Protestants--Methodists and Presbyterians, particularly--lost about a quarter of their members from the 1960s through the 1980s. Catholicism suffered its own decline among Americans of European descent but compensated with a dramatic inflow of Hispanic members. Jews lost significant portions of their religiously active population, though arguably many have found new sources of Jewish identification through Israel and the memory of the Holocaust.&#13;</p>
<p>&#13;<br />
&#13;<br />
By the early 1990s, however, those declines had not only stopped; they had begun to reverse themselves--led by the same baby boomers who had earlier abandoned organized religion. David Roozen of Hartford Seminary, surveying Americans born between 1945 and 1954, has found that regular church attendance among these boomers rose dramatically, from 33 percent in 1975 to 41 percent in 1990, and it appears to be rising still.&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>But if Americans remain overwhelmingly religious, our faiths still come in a rainbow of colors. Roughly a quarter of Americans tell pollsters they're mainline Protestants, another quarter that they're fundamentalist Protestants, and a quarter that they're Catholics. About 10 percent are black Protestants, 2 percent are Jews, 2 percent are Mormons, 1 percent are Orthodox Christians, and another 1 or 2 percent identify with "other religions"--mostly Islam, Buddhism, and Hinduism. (Barely one-tenth of Americans say they have no religious identity.)&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>At first glance, of course, those numbers make America an overwhelmingly Christian country--more Christian, in fact, than India is Hindu, Israel is Jewish, or Latin America is Catholic. However, that massive "Christian majority," as the Christian right likes to call it, is --and always has been--deeply and fractiously divided. What's more, the divisions aren't just liturgical or theological. There are also sharp--and long-enduring--differences in the political and social beliefs of the denominations. &#13;</p>
<p>&#13;<br />
&#13;<br />
Political analyst Kevin Phillips's latest book <i>The Cousins' Wars</i> traces the origin of the divides among progressive, liberal, and conservative Protestant denominations all the way back to the English Revolution, then follows its recurring patterns through the American Revolution and Civil War. &#13;</p>
<p>&#13;<br />
&#13;<br />
In America's post-Civil War period, science and industrialization led to new divisions as well as the deepening of older ones, as the defeated South--still home today to the majority of America's fundamentalists--hardened into religious as well as political conservatism. &#13;</p>
<p>&#13;<br />
&#13;<br />
Meanwhile, mainline Protestants openly embraced not only religious ecumenism but the idea that science was reconcilable with religious belief. That openness in turn fueled support for the Social Gospel movement, which was central in popularizing the reformist idea of government during the Progressive era.&#13;</p>
<p>&#13;<br />
&#13;<br />
Likewise, modern Catholic interest in liberal politics and public policy can trace its own genesis to the nineteenth-century encyclical Rerum Novarum, to Father John Ryan's turn-of-the-century work on living wages, and to Vatican II in the 1960s. In the midst of the Reagan era, the Catholic Church's powerful voice on social-justice issues was epitomized by the U.S. bishops' influential and prophetic declarations on economic justice and nuclear war. &#13;<br />
&#13;</p>
<p><font color="darkred"><b>Faith and Progressivism</b></font>&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>Over the past 20 years, that history has been largely forgotten in our alarm over the Christian right. Yet it takes only a casual reading of major denominational teachings to see just how consistently progressive the faiths of millions of Americans remain--especially when compared to Democratic Party platforms, policies, and presidents in the last 30 years.&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>Here, for example, is an excerpt on "The Economic Community," from the core faith teachings of the 10-million-member United Methodist Church, the largest of America's mainline Protestant denominations:&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>&#13;<br />
&#13;<br /></p><blockquote>We claim all economic systems to be under the judgment of God no less than other facets of the created order. Therefore, we recognize the responsibility of governments to develop and implement sound fiscal and monetary policies that provide for the economic life of individuals and corporate entities, and that ensure full employment and adequate incomes with a minimum of inflation. We believe private and public enterprises are responsible for the social costs of doing business, such as employment and environment pollution, and that they should be held accountable for these costs. We support measures that would reduce the concentration of wealth in the hands of a few. We further support efforts to revise tax structures and eliminate governmental support that now benefit the wealthy at the expense of other persons. &#13;<br /></blockquote>&#13;<br />
&#13;<br />
&#13;
<p>The document goes on to call for limits on the rights of private property, support for collective bargaining, the advancement of more meaningful work and leisure, and an end to the celebration of consumerism. It also endorses specific measures to help migrant labor, limit gambling, break up corporate monopolies, and increase various forms of "work-sharing" and decentralized management on the job. &#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>Or consider recent statements by the Presbyterian Church U.S.A., addressed to its three million members. The church's 1996 General Assembly sought, as one commentator put it, "nothing less than a full-scale assault on poverty at home and abroad, endorsing the provision of national health care, increases in the minimum wage and job-training programs, more investment in housing and education, an increase in U.S. international aid, and the development of a comprehensive plan to revive city life in the United States."&#13;</p>
<p>&#13;<br />
&#13;<br />
In the midst of the Republicans' "Contract with America" and President Clinton's cynical embrace of "triangulation," the Presbyterians went on to explicitly condemn the "large amount of negative campaigning, neglect of the worthiness of the political vocation, and ... the undue influence [of moneyed interests] in the election process." They called on local clergy to speak out on behalf of "our historical commitment to working for economic justice, peace and disarmament, racial and civil rights... ."&#13;</p>
<p>&#13;<br />
&#13;<br />
The 2.5-million-member Episcopal Church is as explicitly unconservative as its larger Methodist and Presbyterian brethren, in some cases even more so. Its most recent national convention, for example, condemned Clinton's welfare reforms, urged new public support for migrant laborers, pressed for strict gun control and the abolition of nuclear weapons, and called for a new trial for Philadelphia death-row prisoner Mumia Abu-Jamal. It also committed the church to supporting local "living-wage" campaigns and launched a comprehensive study of "the theology of work" to begin redressing not only the material but also the moral and civic inequalities that have emerged in the past three decades.&#13;</p>
<p>&#13;<br />
&#13;<br />
The 60-million-member Catholic Church--its stance on gender and abortion notwithstanding--is no less progressive than these mainline Protestant denominations on a host of social and political issues. The U.S. Bishops' pastoral letter "Economic Justice for All," written a decade ago, for example, is still a benchmark statement. More recently, the Catholic Church was the leader among the religious groups that fought Clinton's welfare reform bill and was deeply critical of its implications for social justice generally.&#13;</p>
<p>&#13;<br />
&#13;<br />
Millions of Americans are committed to these progressive organizations or to others that in social teachings are like them (the United Church of Christ, American Baptists, evangelical Lutherans, and several black Baptist and Methodist denominations as well as the smaller Unitarians, Quakers, and Reform Jews). Yet perhaps the most intriguing feature of this entire progressive wing of American religion is its invisibility to those not part of it.&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>The reasons for that invisibility aren't always easy to disentangle. Partly it has had to do with the increasing postwar secularization of the nation's elites, both in the universities and the press. One study of the elite Washington press corps, for example, found that 86 percent seldom or never attended religious services. &#13;</p>
<p>&#13;<br />
&#13;<br />
&#13;</p>
<p>Equally important has been the mental redrawing of the important identity coordinates in American life, especially since the 1960s. Religious affiliation (in particular, denomination) historically served as a distinctive marker of one's location in America's social structure, as documented most famously by H. Richard Niebuhr's <i>Social Sources of Denominationalism</i>.&#13;</p>
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After World War II, a new spirit of ecumenism and the softening of denominational and religious borders--most celebrated in Will Herberg's 1950s classic <i>Protestant, Catholic, Jew</i>--set the stage for what Sydney Ahlstrom, in his Pulitzer Prize-winning history of American religion, has called the "coming of post-Protestant America." &#13;</p>
<p>&#13;<br />
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In this world, especially since the 1960s, gender, race, and sexual preference have taken on new defining importance--and have powerfully submerged the older coordinates of religion, ethnicity, region, and class. Redressing the inequalities associated with the newly ascendant categories has become the defining mission of liberals and progressives alike.&#13;</p>
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<p><font color="darkred"><b>Misreading the Religious Right</b></font>&#13;<br />
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<p>Ever since the rise of, first, Jerry Falwell and his Moral Majority in 1979 and, then, Pat Robertson and the Christian Coalition, many liberals, in their ignorance, have assumed American religion in general has turned conservative. Why, some have argued, haven't religious progressives created their own version of the Christian Coalition? It's a question that misreads what the Christian right has (and hasn't) accomplished--and why.&#13;</p>
<p>&#13;<br />
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<p>First, the secular changes of the twentieth century--especially in the years since World War II--have deeply threatened fundamentalists but have had no parallel effect on the liberal denominations. Fundamentalist Protestants draw on a belief in Biblical inerrancy, the emotional reality of imminent salvation, and a deep-seated suspicion of science and government because they compete with religion for authority. All these views, though, are generally alien to mainline Protestant, Jewish, and, in somewhat different ways, Catholic belief. &#13;</p>
<p>&#13;<br />
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Second, religious progressives have long engaged the political system. As Princeton sociologist Robert Wuthnow and others have repeatedly found, mainline Protestants and Jews, for example, are typically twice as likely as fundamentalists to donate to a party, speak publicly on civic matters, serve in some public leadership role, or belong to politically engaged nonprofit groups.&#13;</p>
<p>&#13;<br />
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There's another issue when it comes to replicating the presumed success of the religious right. Recent polling research suggests that rather than generating a dramatic rise in the ranks of religious conservatives, it is more likely that the Christian right found itself in effect free-riding as traditionally conservative southern voters became Republicans--a realignment that owed more to the civil-rights positions of Lyndon Johnson and Martin Luther King, Jr., than to the organizing abilities of Jerry Falwell and Pat Robertson. &#13;</p>
<p>&#13;<br />
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Importantly, recent press accounts of the Christian right's viability suggest it is facing real--potentially fatal--problems after a 20-year run. As a <i>New York Times</i> article on the Christian Coalition reported this past summer,&#13;</p>
<p>&#13;<br />
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<p>&#13;<br />
&#13;<br /></p><blockquote>The coalition is hobbled by a $2.5 million debt, the departure of most of its experienced leaders and so much turnover in local leadership that it has strong affiliates in no more than 7 states, down from the 48 it claimed last year, according to its staff.&#13;<br />
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<p>&#13;<br />
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And now even its prior assertions to such widespread strength are in doubt. Former national leaders ... said in interviews that the coalition, as critics have long suspected, never commanded the numbers it claimed... .&#13;<br />
&#13;</p>
<p>&#13;<br />
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The coalition, these former leaders say, distorted the size of its base by keeping thousands of names of dead people, wrong addresses, and duplicates on its list of supporters; printed millions of voter guides that the coalition leaders expected would never be distributed, and hired temporary crews to look busy in the mail room and phone banks to impress reporters and camera crews.&#13;</p>
<p>&#13;<br />
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"We never distributed 40 million guides," says Dave Welch, the coalition's former national field director... ." State affiliates took stacks of them to recycling centers after the election... ."&#13;<br /></p></blockquote>&#13;<br />
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<p>&#13;<br />
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<p>People can reasonably disagree about whether the whole Christian-right phenomenon has peaked and is now in decline--or has merely gone underground to focus on state and local politics, as some believe. It's worth noting, though, that both Paul Weyrich and Cal Thomas--major figures in the movement--now argue publicly that, in fact, the Christian right's two decades of efforts have "failed" and the time has come for its supporters to refocus primary attention instead on traditional evangelical concerns.&#13;</p>
<p>&#13;<br />
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<p>&#13;<br />
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<p>Meanwhile, America's progressive religious community goes on--for the most part ignored by those who like to think of themselves as progressive but who have no connection to the nation's religious world. Of course, one can't count all the members or leaders of these churches and synagogues as avid supporters of their denominations' official views--far from it. In truth, like the Democratic Party or any labor union, progressive religion finds that large numbers of its constituents are indifferent, even sometimes hostile, to the voices of their leaders.&#13;</p>
<p>&#13;<br />
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<p>Yet the central fact remains: In an era when progressive voices seem few in number, when many progressive organizations struggle to meet payrolls, let alone advance agendas, America's progressive religious world represents a large body of committed and caring human beings--deeply bound, out of their own understanding of the connection between justice and the divine--who seek a world most of us could generously affirm.&#13;</p>
<p>&#13;<br />
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Like the rest of us, they struggle with their own limitations, their own internal conflicts and weaknesses. Yet time and again at crucial moments in American history, these same communities have risen up to resist abuses of human dignity and justice in the world around them.&#13;</p>
<p>&#13;<br />
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Tocqueville, back in the 1830s, clearly saw this feature of American religion already alive and thriving--and he approved. "Religion in America," he shrewdly reported, "takes no direct part in the government of society, but it must be regarded as the first of their political institutions." At the end of the twentieth century--on the eve of a new millennium--there's a lesson in the Frenchman's canny insight that many of us have yet to understand. </p>
</div></div></div>Wed, 19 Dec 2001 21:08:21 +0000140673 at http://prospect.orgRichard ParkerScreening a La Cartehttp://prospect.org/article/screening-la-carte
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"> <p><font class="nonprinting"><font size="+2">I</font>n a culture that is seen to be spinning out of control, the V-chip has generated an extraordinary alliance across conventional class and political lines, from the Christian right to progressive media reformers, and in Congress, from conservative Senator John McCain to liberal Congressman Ed Markey. According to a <i>New York Times</i> poll from last February, more than 80 percent of parents say they consider the V-chip (or something like it) an indispensable part of their families' information age future. </font></p>
<p><font class="nonprinting"><img align="Right" alt="illustration by Ben Auburn" border="0" height="183" hspace="10" src="../images/36park01.gif" vspace="10" width="129" />To its most ardent proponents, the V-chip is a technological Statue of Liberty, the shining light that will help lead parents back to control over the morass that commercial television has become. To its opponents, it's rather less than that: one more example of the quick-fix gizmo worship to which Americans have long been prone. Worse, it's potentially a fundamental threat to civil liberties, part of a new and unwelcome Big Brotherism sweeping the country.</font></p>
<p><font class="nonprinting">But like it or not, the V-chip is coming; outflanked by their opponents, television broadcasters gave in to the inevitable last year. By law, TV manufacturers must begin selling sets equipped with the device later this year. Already, "TV-PG," "TV-14," and "TV-M," along with "V," "S," "D," and "L" (for violence, sex, suggestive dialogue, and language) flash for 15 seconds at the start of most prime-time shows. After fighting even these simplified letter ratings for years, broadcasters finally conceded as part of the trade-off for the omnibus Telecommunications Act of 1996. The concession was cheap in one sense—the act gave broadcasters huge gifts including new mega-merger opportunities and free spectrum worth billions of dollars. But that didn't make the bitter V-chip pill any easier for them to swallow. </font></p>
<p><font class="nonprinting">In New York and Hollywood executive suites, the V-chip is seen as the first in a wave of congressional acts that could cut deeply into audience viewing and advertising revenues. For the Big Three networks, already reeling from cable channels' cannibalization of their once-comfortable world, the V-chip and the underlying debate over television ratings have been as welcome as a Toyota once was in Detroit. </font></p>
<p><font class="nonprinting">But the first half of 1997 seems to have calmed broadcasters' fears, at least temporarily. So far, few parents are paying much attention to the little rating icons, to judge by Nielsen ratings. That was exactly what V-chip supporters warned would happen: Leaving ratings design to the broadcasters themselves would undercut the purpose of the technology. And that fact in turn has spurred TV's critics to gear up for a new round of attacks on the industry, causing many to wonder when, if ever, the fighting will stop. </font></p>
<p><font class="nonprinting">To Alfred Sikes, former chair of the Federal Communications Commission (FCC), the answer is clear: "The only way this fight ends is for the Supreme Court to draw a clear line, to say what can be regulated. I think at some point the Court is going to speak more concretely, but until that happens, this doesn't end."</font></p>
<p><font class="nonprinting">But relying on the Supreme Court could carry reformers and concerned parents back to ground zero, particularly if the Court chooses to interpret congressional involvement in the rating process as a further threat to the First Amendment. This summer, in two votes (one by seven to two, the other a unanimous decision), the Court struck down the so-called Communications Decency Act, which was meant to shield children from "indecent" material on the Internet. The Court's decision worried many TV reformers and gave cause for private celebration among TV executives.</font></p>
<hr size="1" /><center><font class="nonprinting"><a href="/subscribe/"><img alt="Subscribe to The American Prospect" border="0" src="/tapads/mini_subscribe.gif" /></a> </font></center><br /><hr size="1" /><p><font class="nonprinting">But even as it struck down the internet law, the Court signaled it might approve new computer software that lets parents, rather than the government, limit access to pornographic or violent Web sites and chat rooms [see Joshua Micah Marshall, "<a href="marshall-j.html" target="_top">Will Free Speech Get Tangled in the Net?</a>"]. Such parentally controlled "screening agents," although still in their technological infancy, provide, in the Court's view, "a reasonably effective method by which parents can prevent their children from accessing sexually explicit and other material."</font></p>
<p><font class="nonprinting">The Supreme Court's distinction—between what goes on the Internet, and who gets to view it—lies at the heart of what is likely to be the next stage in the debate over the V-chip and television. Although Congress has now mandated V-chips for all new televisions, the FCC has yet to set the technical standards and capacities governing the device. With television set manufacturers already tooling up for the 1998 deadline, it will have to do so soon. </font></p>
<p><font class="nonprinting">If the government tries, via V-chip regulations, to set standards for TV content, chances of Supreme Court support are slim; but if the TV industry is left to set the standards (as seems most likely according to FCC insiders), the results are likely to match what they've been in the last six months: almost nil. The alternative is for the FCC to prescribe a smarter—and more useful— alternative, based on what's already happening on the Internet. </font></p>
<p><font class="nonprinting"><font size="+2">W</font>hy not open up the job of rating TV shows to any "screening agent" group— from the PTA to the Christian Coalition, from the National Rifle Association to the National Organization for Women—that wants to do it? Each group would then offer its own judgment about the appropriateness of programs. If the NRA found <i>Married with Children</i>, <i>Beavis and Butthead</i>, or even a televised <i>Natural Born Killers</i> wholesome family fare, so be it; if the <i>Nation</i> or the Unitarians think these shows are destructive, violent, misogynistic trash, fine, let them say so. The screening group, in theory, could be of virtually any kind: nonprofit or for-profit organizations, publications, religious or educational groups, trade associations, enterprising information entrepreneurs. If the National Swimwear Manufacturers want to rate <i>Baywatch</i> as outstanding, they should be welcome to do so.</font></p>
<p><font class="nonprinting">A parent should then have several options: one is to subscribe electronically to one of the screening agents on a monthly basis. As a new show came on, the specific agent's rating would appear on the TV screen. If the show violated some threshold—say, a level of violence or overt sexuality that a parent didn't want is or her child to see—the show would be blocked. </font></p>
<p><font class="nonprinting">The ratings themselves could be broadcast through underutilized spectrum now devoted to closed captioning, or via cable (two-thirds of American households subscribe to cable TV). As digital transmission becomes a reality early in the next century, parents would have even more options, including scanning several screening agents for comparative ratings.</font></p>
<p><font class="nonprinting">Using their TV remote controls and a personal identification number (like those now used for ATMs), parents could override the screening agent and watch whatever they want. Of course, clever adolescents (who resets the VCR in most homes when it blinks "12:00-12:00-12:00"?) might try to crack the system, but they'd have to discover their parents' PIN.</font></p>
<p><font class="nonprinting"><font size="+2">T</font>he attractiveness of the system is that it keeps government out of the business of judging TV content and yet refuses to trust broadcasters to act in something other than their own self-interest. (Been to a PG-13 movie recently?) But, given the thousands of shows on every day, wouldn't it be impossible to implement? Not if the screening agents were paid, say, a dollar a month by each subscriber—something like 2 to 3 percent of what most Americans now pay for the privilege of cable, with the charge itself part of the monthly cable statement. Multiplied by hundreds of thousands, potentially even millions, of subscribers, that would add up (in the words of the late Everett Dirksen) to real money. And that money would often flow into the coffers of some worthwhile, and often cash- starved, nonprofit groups. </font></p>
<p><font class="nonprinting">Initial costs to establish the ratings would be high for the screening groups, of course. But given the extraordinary number of reruns, and the fact that new series generally adhere to their own internal standards show after show (no one would ever confuse <i>Touched by an Angel</i> with <i>NYPD Blue</i>), the job would smooth out rather quickly. After all, as every <i>TV Guide </i>reader knows, those same programs already have their own unique four-digit codes, put there to help record programs on your VCR when you're out of the house or otherwise unavailable.</font></p>
<p><font class="nonprinting">For jurists and civil libertarians, letting parents choose among intermediate groups for screening advice gets the dangers of Big Brother censorship out of the picture. For parents, the groups help do the otherwise impossible job of monitoring the programs spewed out by the growing number of channels. For the screening groups themselves, especially worthwhile nonprofits, the opportunity is for new public service and much-needed revenues from their supporters.</font></p>
<p><font class="nonprinting">Broadcasters will initially object if they see it cutting into total viewing— as it likely might. But left to endless battles with Washington, the alternatives could prove worse. After all, hasn't it been the broadcasters themselves who justify what they put on the air with the line, "It's not us, it's the audience who watch the shows"? Why not let the audience watch what they truly want, including what they want their children watching? Screening agents won't solve all the problems of what Newton Minow, the former FCC commissioner, famously dubbed our "vast wasteland," but it's still a step worth taking, and one that breaks the impasse between what television now is and what millions of American parents say they would like it to be.</font></p>
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</div></div></div>Wed, 19 Dec 2001 19:18:34 +0000141062 at http://prospect.orgRichard ParkerCan Economists Save Economics?http://prospect.org/article/can-economists-save-economics
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"> <p><font class="nonprinting"><i>Economics is what economists do.</i><br />--Jacob Viner </font></p>
<p> </p>
<p><font class="nonprinting"><font size="+3">T</font>he trouble with Professor Viner's delicate evasion is that economists no longer agree about what they do, or even whether it is all worth doing. Critics outside the profession long faulted economists for a host of sins: their deductive method, their formalism, their over-reliance on arcane algebra, their imperviousness to complex evidence, the bald inconsistency of different facets of the economic paradigm. What's new--after decades of steadfast resistance--is that these same concerns have begun to bother the profession too. </font></p>
<p><font class="nonprinting">As mainstream economics over the past two decades has splintered into openly warring camps, the profession has found it ever harder to sustain its long-held claim to be "queen of the social sciences." That claim is based on economists' insistence on speaking, especially since World War II, in the seemingly precise idiom of mathematics. George Stigler, a leader of the Chicago School, once rather nastily claimed that "without mathematics, we'd be reduced to the caviling of sociologists and the like." </font></p>
<p><font class="nonprinting">The very rigor of formal economics, however, has too often ended up offering Procrustean accommodation. Rather than clarifying the real world (a nominal goal for all sciences), it comes between economists and the phenomena they're trying to understand. This weakness matters to the world beyond textbook and classroom, for unlike many associates in less "regal" social sciences, economists have real power. They have substantial influence on how policymakers define problems, perceive choices, and, ultimately, set policy. </font></p>
<p><font class="nonprinting">With outsiders, economists often in the past denied the scope of their disagreements--or jovially downplayed them as just a "healthy debate" within "the family." Paul Samuelson--to pick a prominent example--has even used both approaches: to his textbook readers, he once sniffed that neoclassical theory "is accepted by all but a few extreme left-wing and right-wing writers." Then, in a lighter vein, he admitted: "If parliament were to ask six economists for an opinion, seven answers would come back--two, no doubt, from the volatile Mr. Keynes." </font></p>
<p><font class="nonprinting">These days, the debates within economics are sounding rather less good-natured. The churlish responses to Laura Tyson's selection as head of the Council of Economic Advisers and Robert Reich's posting as Labor Secretary are only one measure of the stakes at hand. Both represent a healthy commitment to real-world empiricism and pragmatically grounded policy; in a significant way, their ascendancy is a sign that the reigning neoclassical paradigm may finally be cracking up. </font></p>
<hr size="1" /><center><font class="nonprinting"><a href="/subscribe/"><img alt="Subscribe to The American Prospect" border="0" src="/tapads/mini_subscribe.gif" /></a> </font></center><br /><hr size="1" /><p><font class="nonprinting">Despite the overdue revisionism, however, it is not at all clear that economics is capable of fundamental change. For the few postulates that continue to unite economists--the belief that markets normally optimize outcomes, the assumption of a general equilibrium, the premise that self-interested individuals make rational choices in a social vacuum, that institutions don't matter much--are precisely where the stylized model departs most dramatically from the always-messy real world. For respectable dissenters inside economics such as Paul Romer, Robert Frank, or Paul Krugman, attempting to reconcile these complex realities with the assumptions and methods of economics is increasingly like trying to square the circle. </font></p>
<p><font class="nonprinting">In the 1970s, Samuelson's famous neoclassical synthesis of classical economics and Keynesian macroeconomics began breaking down. The economy itself turned out to be rather harder to tame than the neo-Keynesian apostles of "fine-tuning" had expected. Dissenters from both left and right began challenging the behavioral assumptions, the methodological conceits, and the practical possibility of benign macroeconomic stabilization. In keeping with the increasingly conservative mood of the times, many in academic economics wove together a new fundamentalist classicism that came in several strands but whose common thread was the idea that state intervention could never improve on the outcomes of markets and that public policy's main challenge was to get out of the way. </font></p>
<p><font class="nonprinting">Then in 1979, the <i>American Economic Review</i> published a major poll intended to gauge the breadth of economic consensus. Instead, the pollsters found intellectual chaos. </font></p>
<p><font class="nonprinting">Asked 30 questions covering a range of textbook "softballs"--from the merits of free trade to the Federal Reserve's role in stopping inflation to whether the Phillips Curve still mattered--economists were asked whether they "generally agreed," "agreed with provisions," or "disagreed." Far from confirming Samuelson's world of near-universal accord, the study revealed that strong consensus (60 percent accord or more) could be found on only 10 of the thirty questions. On most questions, the profession was divided: on 17 questions, only about half opted for general agreement or disagreement. On 4 of the questions, consensus never reached 40 percent. </font></p>
<p><font class="nonprinting">Last year, the <i>Economist</i>--generally a cheerleader for the market model--published a ten-part series on the state of modern economics, frankly acknowledging how the profession's fractiousness and muddle call into question its claim to be a "science" (as commonly understood). "For roughly 25 years after 1950...it was fair to talk of a broad economic consensus on economic questions...called 'the neoclassical synthesis'. Few of today's leading theorists find it fruitful to cast their ideas in terms of the old framework. [The result is that] in the modern debate among and within the different schools, economists talk past each other." </font></p>
<hr /><h3><font class="nonprinting">IDIOTS SAVANTS?</font></h3>
<p><font class="nonprinting"><i>I am here to report that there is absolutely nothing wrong with the current state of economics....Besides, the discipline's fundamental problems are being remedied as quickly as can reasonably be expected.</i><br />--William Baumol </font></p>
<p> </p>
<p> </p>
<p><font class="nonprinting">Despite all the external criticism, most economists themselves have shown a steadfast resistance to fundamental change, oddly combined with a growing appetite for searching self-criticism. In 1991, the <i>Journal of Economic Literature</i> published the results of a two-year study by the blue-ribbon Commission on Graduate Education in Economics (COGEE) of the American Economic Association (AEA). This committee could hardly be dismissed for marginal carping by the profession's malcontents: indeed, chaired by Anne Krueger, the commission included Kenneth Arrow, Olivier Blanchard, Alan Blinder, Claudia Goldin, Edward Leamer, Robert Lucas, John Panzar, Rudolph Penner, T. Paul Schultz, Joseph Stiglitz, and Lawrence Summers. The survey drew from the 91 university economics departments that produce 90 percent of the country's PhD economists, with special in-depth research at 35. </font></p>
<p><font class="nonprinting">The results are troubling. Quite apart from whether its content and method are robust, economics has reason to worry about its success in the marketplace. Measured in terms of the competitive world of academic enrollment, economics today is something of a rust-belt industry. According to the COGEE's statistical annex, enrollment in economics graduate programs, after nearly tripling during the 1960s baby boom, has stagnated for a quarter century, with the annual number of freshly minted MAs and PhDs constant at just over 2,800. Like Detroit, economics graduate programs have languished, while competing academic industries--business administration and public policy, for example--have thrived. In addition to the nearly 70,000 new MBAs each year, business and public policy schools now grant 5,700 new MAs and PhDs--twice the number of new economists produced annually. </font></p>
<p><font class="nonprinting">As economics has lost academic market share, it has also faced, like other declining industries, escalating complaints about the quality of its product--its core theory and how it is taught. The problems appear to be, in economists' terms, both a deterioration of human capital and a technology increasingly mismatched to its labor force and customer demands. </font></p>
<p><font class="nonprinting">Looking at one input, COGEE found that verbal literacy among those enrolling in graduate economics (as measured by Graduate Record Exam scores) has declined in the last 15 years. Major liberal arts colleges--once a source of some of the best students--report roughly an 80 percent drop in economics as a graduate study choice for their top students. And while the mathematical abilities of economics graduate students (again measured by the GRE) have barely changed--with these students consistently ranking 80 points to 100 points below entering grad students in physics, engineering, and mathematics--the math requirements of economics have substantially increased. </font></p>
<p><font class="nonprinting"><font size="+3">I</font>ndeed, the heavy reliance on advanced mathematical techniques has led finally to a rebellion within the economics mainstream. Asked by COGEE whether economics training now "overemphasizes mathematical and statistical tools at the expense of substance," 61 percent of graduate professors agreed. </font></p>
<p><font class="nonprinting">"Our major concern focuses on the extent to which graduate education in economics may have become too removed from real economic problems," the commission writes. "COGEE members from their own experience shared the perception that it is an underemphasis on the `linkages' between tools, both theory and econometrics, and `real world problems' that is the weakness of graduate education in economics." Buttressing the commission's worries, faculty and students alike, when asked to rank what received "more" or "less" emphasis in graduate training, consistently noted how little was taught about economic institutions, real-world applications, and economic history--compared with abstract theory and econometrics. </font></p>
<p><font class="nonprinting">This complaint about relevance isn't limited to the highly abstract level of core theory and econometrics. Students are also expected to complete so-called "field" subjects in their graduate programs (such as labor, international trade, public finance, economic history, and development), where theory would presumably find practical application. Yet according to the commission, "most students do not find the fields serve this function. Concerns about the absence of an empirical and applied basis in the entire economics curriculum were expressed in the open-ended responses to the questionnaires. Students and faculty both noted the absence of facts, institutional information, data, real-world issues, applications, and policy problems." </font></p>
<p><font class="nonprinting">As if to compound the indictment of irrelevance, the commission (perhaps not surprising to many noneconomists) found that young PhD economists lacked the ability to communicate coherently what they did know. Surveying academic and nonacademic employers, as well as journal editors and readers, the report notes that "dissatisfaction seems to stem in part from the perception that too much jargon is used, and in part from the conviction that many students lack basic expository skills." (The frustrations vented among nonacademic employers must have seemed particularly tart to the professors: "their assessment," notes the commission ruefully, "is that graduate school does not prepare new PhDs effectively for employment in anything but other graduate economics programs.") </font></p>
<p><font class="nonprinting">Not surprisingly, over three-fifths of graduate faculty now believe that their department's programs need to be revised, with only 30 percent seeing no such need. Among graduate students, the numbers are even higher: Of those students with the greatest math training, 73 percent want change, and of those with the least math training, 100 percent want change. </font></p>
<p><font class="nonprinting">Clearly troubled by its findings, the AEA report concludes: "The commission's fear is that graduate programs may be turning out a generation with too many idiot savants skilled in technique but innocent of real economic issues."1 </font></p>
<p><font class="nonprinting">Yet having brought what looks to an outsider like a devastating series of indictments against the profession, the commission's economists struggled valiantly to offer soothing reassurance to their colleagues. On the one hand, the commission suggested more remedial math training for new students and stiffer entry requirements for those without undergraduate economics degrees. But it balanced these recommendations by calling for more application of theory to real-world problems, more field courses with empirical applications, and even greater specialization by graduate departments. </font></p>
<hr /><h3><font class="nonprinting">MARKET AND HIERARCHY</font></h3>
<p><font class="nonprinting"><i>To say that something is wrong with graduate education is to say that something is wrong with the economics profession.</i><br />--<i>Robert Solow</i> </font></p>
<p><font class="nonprinting">In Fall 1987, The <i>Journal of Economic Perspectives</i> published an important study by economists David Colander and Arjo Klamer (their findings were more extensively reported in their 1990 book, <i>The Making of an Economist</i>). They targeted for both polling and in-depth interviews only the top six graduate schools that dominate the profession. (The criteria used to determine school standing included academic citations, awards, and GRE scores, variables that while by no means free of dispute, approximate the perceived standing of various departments.) The most widely recognized ranking, the National Research Council's 1982 study of economics graduate departments, is based on a pyramid of five "tiers," with so-called Tier 1's six (of 120) schools at the top, followed by Tier 2's nine, and so on. </font></p>
<p><font class="nonprinting">The Colander-Klamer study sheds light on how economists organize and transmit knowledge and on how they maintain professional cohesiveness. Of the 18,000 or so economics PhDs in the United States, more than 12,000 teach. But only about 3,000 teach at the graduate level. In this small circle, the sorting goes on even more carefully among the tiers, especially at the top-level schools--suggesting what a critic might see as intellectual inbreeding. (COGEE calls this, rather more neutrally, a tendency "for emulation rather than diversification.") </font></p>
<p><font class="nonprinting">Tier 1 schools, for example, draw nearly two-thirds of new hires from among their own PhDs. Down at Tier 5, more than 80 percent of new PhDs come from higher tier departments. COGEE, ever cautious, notes the effort at status improvement thus: "In an effort to increase their recognition, departments of less distinction emulate top-ranked programs by hiring PhDs from those departments." For Colander and Klamer, this controlled hiring process means that the community that makes up the top echelons of economics professors hierarchically tends to be--as one might expect--more homogeneous than heterogeneous in outlook, especially on mathematical formalism in economics. This outlook inevitably winds its way from faculty hires to admissions committees, to graduate students, and to undergraduate teaching. </font></p>
<p><font class="nonprinting">Despite this cohesive vertical hierarchy, however, the study shows wide disagreement among the schools at the top. For example, University of Chicago students are the most convinced of the practical relevance of neoclassical economics, while Harvard's are the least. When asked if they saw a sharp dividing line between "positive" and "normative" economics, 75 percent at MIT and 84 percent at Harvard responded "no," while most Chicagoans firmly said "yes." Asked whether inflation is primarily a monetary phenomenon, Chicago students didn't merely agree--they agreed 100 percent. (At Harvard, almost half would disagree.) While MIT students firmly believe that fiscal policy can be an effective macroeconomic stabilization tool, 44 percent at Chicago disagree. Economists themselves are all too aware of these schisms. Asked whether "economists agree on fundamental issues," only 4 percent of these top students strongly agreed, while 52 percent openly disagreed. Forty percent said they "agree somewhat." </font></p>
<p><font class="nonprinting">But on one issue, the Colander-Klamer study found depressing consensus--what it takes to succeed as a professional economist. Most students cited "being good at problem-solving" and "excellence in mathematics" as paramount. Fewer than 3 percent thought "having a thorough knowledge of the economy" was "very important"; 68 percent thought it was "unimportant." </font></p>
<p><font class="nonprinting">Asked whether being good at empirical work was very important for professional success, barely one in eight students agreed. Having a broad understanding of economic literature fared even worse: only one in ten thought it very important, while almost half said it was "unimportant." </font></p>
<p><font class="nonprinting">To some prominent economists, including the profession's most notable mathematicians, these findings come as small surprise. Nobel laureate Wassilly Leontief warned nearly two decades ago in his AEA presidential address that "uncritical enthusiasm for mathematical formulation tends often to conceal the ephemeral substantive content of the argument behind the formidable front of algebraic signs." Fellow laureate Kenneth Arrow feels likewise. Having served on the COGEE commission, he now worries that the problem is not just graduate education. "The math," he says, "takes on a life of its own because the mathematics pushed toward a tendency to prove theories of mathematical, rather than scientific, interest." </font></p>
<hr /><h3><font class="nonprinting">KISS OF DEATH</font></h3>
<p><font class="nonprinting"><i>Economics (before World War II) was a sleeping princess waiting for the invigorating kiss of Maynard Keynes...but...economics was also waiting for the invigorating kiss of mathematical method.</i><br />--<i>Paul Samuelson</i> </font></p>
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<p><font class="nonprinting">While excess abstraction would seem to be a recent complaint, rooted in the heavy reliance on mathematics since World War II, the criticism is more than a century old. A recent review by Deborah Redman of methodological disputes among American economists begins its survey in 1860 and counts no fewer than 80 examples of basic "methodological" debates before 1900. </font></p>
<p><font class="nonprinting">Though few remember, the American Economic Association itself was founded in dispute--and not just over early mathematical methods but over the very intent and use of economics itself. Founded in 1885 by Richard Ely, the AEA was organized as a progressive counterweight to what its members saw as the social Darwinism then emerging in the social sciences. The founders considered the better established "English economics" an especially dangerous influence on America's fledgling democracy. The British school was, in American eyes (as historian A.W. Coats writes), "out of touch with the living reality, too ahistorical, and too wedded to the view that economic life was organized around an immutable and universal natural law. Moreover, its predisposition in favor of laissez faire was pernicious." </font></p>
<p><font class="nonprinting">Ely himself was a powerful advocate of the Christian Social Gospel and felt that "the right-minded citizen should work for uplift of society's downtrodden, should encourage the formation of voluntary associations (such as labor unions and cooperatives) to protect the weak, and should promote active intervention by the state to correct injustice in the distribution of income and of economic power." That kind of talk resonated among America's first economists. At a time when academic faculties and the Protestant clergy still overlapped heavily, 30 of the 50 founders of the AEA were in fact ordained ministers. </font></p>
<p><font class="nonprinting">By the early decades of the twentieth century, the debates over the purpose of economics and the appropriate uses of mathematics were still raging. Regionalism--always a powerful factor in American life--was also at play. On the conservative and "high-math" side stood the elite Eastern universities that invoked presumably value-free "scientific economics" in lieu of the more troublesome and less rigorous "political economy." Arrayed against them were the Midwestern and Western land-grant colleges whose faculties comprised many social activists and well-known critics of laissez faire (despite widespread attempts by local industrialists and politicians to curb their voices). </font></p>
<p><font class="nonprinting">At Wisconsin, California, and elsewhere, institutionalist economists such as Ely, John Commons, Wesley Mitchell, John Bates Clark, and Thorstein Veblen openly warred with their Eastern competitors. As one of the Midwesterners would write at the time, "Nobody cared when we dealt in abstractions...but talk of trusts, etc.--and conversation grows personal." Veblen, in a then-famous phrase linking the interests of the new industrial wealth to the Eastern academics, taunted the latter as "the captains of erudition." </font></p>
<p><font class="nonprinting">By the 1920s, however, the twin triumphs of industrialization and professionalism, the decline of farmers as a majority, and the partial successes of the reformers on issues from antitrust to child labor all contributed to a growing dominance by "scientific economics." In universities, keen-eyed trustees, alarmed by the perceived threat of Bolshevism, scrutinized faculty appointments. Marshall and Taussig replaced Ely and Commons as the accepted undergraduate texts. The German historical and <i>sozialokonomie</i> approach of Frederich List, Gustav Schmoller, Werner Sombart, and Max Weber--once so vital to the anti-British school--was undercut by the anti-German patriotism of World War I. </font></p>
<p><font class="nonprinting">The Clutch Plague and New Deal, of course, brought a resurgence of "social" interests among younger economists. Washington's demands for economists mushroomed, and the brightest young talent had a more interventionist inclination. With the publication of John Maynard Keynes's <i>The General Theory</i>, moreover, these young economists finally had what Thomas Kuhn claims is necessary for a "scientific revolution"--an alternative paradigm, not just a mass of "troubling facts" the older paradigm failed to explain. </font></p>
<p><font class="nonprinting">But as Samuelson's remark above makes clear, economics --ever the fickle maiden--shared her favors with others. (Extending the conceit, one might even count Samuelson himself, with <i>Foundations of Economic Analysis</i>, as the chief paramour proffering the seductions of the calculus.) By the late 1950s, economics' fixation on its advanced mathematical skills in econometrics, game theory, and computer-based modeling led the way to a conservative counterrevolution. The math invited a mechanistic conception of society and allowed a rather tepid version of Keynesianism to be wedded to the self-regulating machine of classical theory. </font></p>
<hr /><h3><font class="nonprinting">REBELLION AT THE MARGIN</font></h3>
<p><font class="nonprinting"><i>Two kinds of people I distrust: architects who profess to build cheaply, economists who profess to give simple answers.</i><br />--<i>Joseph Schumpeter</i> </font></p>
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<p><font class="nonprinting">Through the postwar era of economic science, there have been stirrings of rebellion. Schumpeter--whom Samuelson, among many, ranks as the twentieth century's second-greatest economist (after Keynes)--worriedlate in life about the postwar direction of economics. In the 1930s, he had argued strongly for increased use of mathematics by economists and was one of the founders of the journal <i>Econometrica</i>. But he was keenly aware that for economics to call itself a "scientific" pursuit, it could not simply mime sciences like physics. </font></p>
<p><font class="nonprinting">To the consternation of Samuelson (who suggested but then retracted the idea that his former teacher was growing senile), Schumpeter laid out in his last great work, <i>The History of Economic Analysis</i>, what he considered the four core fields of economics: economic theory, economic history, economic sociology, and statistics. No one of these fields, he stressed, should be allowed to dominate the others. For Schumpeter, the danger latent in economists' fascination with physics was that unlike physical objects and phenomena, human social relations require that economists deal in "meanings"--whether the assigned meanings of formal theory or the observed meanings of everyday economic life. Without a much broader knowledge of economic history and institutions and the byways of day-to-day economic life, Schumpeter warned, the "tools" of formal economic analysis were not only useless but deceitful. </font></p>
<p><font class="nonprinting">History foremost was where Schumpeter located the foundations of modern economics--for, he said, three crucial reasons. First, because all economic events occur within history, economics cannot possibly claim meaning outside historical facts and a sense of historical experience. Second, history offers the best means for understanding "how economic and noneconomic facts are related and how the various social sciences should be related." Finally, Schumpeter warned, lack of historical knowledge was one of the commonest sources of error in economics. Reflecting on Schumpeter's conception of economics 40 years later provides at least one road out of the briar patch into which the discipline has fallen. One is reminded that even in the years after Schumpeter wrote, the very pedagogy he affirmed was still alive in American economics. </font></p>
<p><font class="nonprinting"><font size="+3">I</font>n 1953, Princeton economist William Bowen (now president of the Mellon Foundation) completed the last major study of economists' graduate education comparable in scope to the COGEE report. Two things stand out. Bowen's report is assiduous in its willingness first to prescribe what economists ought to know and second to assert how subordinate a role advanced mathematics played in such teaching and practice. (As Robert Heilbroner reminds me, math played a tangential role in verbal expression as late as the early 1950s.) </font></p>
<p><font class="nonprinting">Bowen found that emphasis was on ensuring young professionals were deeply grounded in a broad understanding not only of theory but of economic history and real-world functioning. Regardless of their field, Bowen wrote, all economists "should have some acquaintance with international economics, public finance, banking, agricultural economics, industrial organization, labor, insurance, business cycles, transportation, public utilities, etc. The need for this general knowledge extends to the various fields of business such as management, investments, corporate finance, personnel, accounting, and marketing." Advanced mathematics, far from defining what economists do, should be one of several "research tools" that "can be put to the service of economics." </font></p>
<p><font class="nonprinting">Bowen was not offering a personal prescription for what the "renaissance" economist ought to know. When surveyed about the ideal ranking of a graduate curriculum, 98 percent of faculty listed broadly defined "economic theory" as what first ought to be taught, 55 percent listed economic history, 53 percent statistics--and only 10 percent mathematical economics or econometrics. </font></p>
<p><font class="nonprinting">Others since Bowen have consistently pointed toward the need for economics to recover breadth in order to recover both coherence and relevance. Some, such as John Kenneth Galbraith and Albert Hirschman, have simply proceeded to do economics, ignoring postwar preoccupations with game theory, stochastics, and advanced modeling. In one of his most-quoted observations, Galbraith declared that "there are no useful propositions in economics that cannot be stated accurately in clear, unembellished and generally agreeable English." Robert Heilbroner, in a recent colloquium on economics teaching, stressed again the need for historical and institutional grounding as a precondition for theory--for the important teaching of "some sense of economic geography; of occupational trends; of the relative size of sectors; the extent and kind of stand and local, as well as federal, governmental operations; of the structure of proprietorships and corporations; the workings of the stock market, and other such lowly information." Beginning students, Heilbroner urges, would be best served by using the Statistical Abstract and Karl Polanyi's <i>The Great Transformation</i> in place of most modern economics textbooks. </font></p>
<p><font class="nonprinting"><font size="+3">T</font>he likes of Galbraith and Heilbroner have long criticized economic formalism. But they had done so as distinguished insider/outsiders with broad public affection but little influence on economic pedagogy. What has changed lately is the growing self-criticism by members of the profession closer to mainstream, formalistic methodology. </font></p>
<p><font class="nonprinting">Donald McCloskey of the University of Iowa created a major stir with his 1985 book <i>The Rhetoric of Economics,</i> adopting a deconstructionist strategy drawn from the humanities. Arguing that its mathematical method needs to be viewed as an elegant metaphor, McCloskey subjects economics to a close textual reading designed to reveal not only its story-telling nature but the moral and analytical premises hidden in its seemingly value-free stories. He persuasively argues (not without some horrified detractors) that doing economics involves using mathematics as a story-telling defense against the simpler, natural-language forms of arguing meaningfully about how we allow the social and economic order (and its privileges and disadvantages) to be ordained. McCloskey therefore proclaims not that economists should abandon mathematics but that self-conscious awareness--"knowing what we do"--in choosing images, symbols, and forms would enrich professional insight. </font></p>
<p><font class="nonprinting"><font size="+3">R</font>obert Frank, at Cornell, underscores both the prejudices of those who end up choosing economics as a career and the effect of economics' normative claims on their value systems. Surveying the charitable giving patterns of economists versus other academics, he finds the profession profoundly influenced, to the detriment of altruistic behavior, by its own premise of the self-maximizing individual. In fact, to the dismay of conventional economists, he argues that far from being "rationally self-maximizing," we are all constrained to foresee the wishes and goals of others and behave in ways that take into account mutual interests. If taken seriously, this challenging hypothesis could have a profound effect not only on theory but on the ability to model consumer behavior. </font></p>
<p><font class="nonprinting">This restiveness with the old order has gained pace in recent years among the brightest younger economists. Paul Krugman and Paul Romer, to pick two examples, have added smart, yet conventional, mathematically driven models of societies in which neoclassical laws are not merely "violated" but turned on their heads. Krugman's work, especially in strategic trade policy and the new international economics, argues against one of economics' most sacred tenets, the Ricardian theory of comparative advantage. Under it, economists have long held that free trade "equalized" the benefits of differences among countries, with only each country's specific "comparative advantage"--of land, skilled (or cheap) labor, technology, and so on--determining what a country eventually will produce. Krugman's "new view" has shown in detail--commonsensical, though revolutionary for economists--that the location of production is substantially arbitrary and that historical location of industries, national policies like taxation and technology training, and economies of scale all help determine where industries are located throughout the world. Yet as a good neoclassical, Krugman recoils from many of the implications of his revisionism. </font></p>
<p><font class="nonprinting">Romer's work on growth modeling--once the grand hope of postwar economists for their predictive usefulness--provides challenge to another hoary shibboleth: the "law" of diminishing returns. Under it, the rate of return on capital stock and growth of per capita output are expected to be decreasing functions of per capita capital stock levels. What Romer has ingeniously shown is that by incorporating technology into competitive equilibrium models, not only can growth rates increase over time but effects of small innovations and disturbances multiply over time. Thus rather than "converging" economically over time (as the conventional model comfortably promises), growth rates may diverge. As an institutional story, the appropriability of technology, its pricing and diffusion, becomes at least as important as standard macroeconomic elements and factor endowments in explaining growth. By looking at technology as a key explanatory variable and noting that markets do not price innovation optimally--hence governments must contrive patents, copyrights and trademarks--Romer builds on a Schumpeterian economics of imperfect competition, though in a mathematically elegant fashion that keeps him (barely) within the paradigm. </font></p>
<p><font class="nonprinting">Taken alone, work such as McCloskey's, Frank's, Krugman's, and Romer's suggest troubling inconsistencies in the formalism of modern economics. Taken together, they suggest that blind men have been grasping not different parts of the same elephant but a chimeric pachyderm of their collective making. </font></p>
<p><font class="nonprinting">The state of play today is something of a stand-off. Clearly, economists can now no longer speak--as Samuelson once did so confidently--of a consensus about what they do. The only consensus in economics today is that things must change. At the same time, the heretics have not quite defined a competing paradigm and are not even comfortable confessing that aspiration. If economists acknowledge that far from approaching the "hard science" toughness they claim to admire they are actually awash in conflicting aims, methods, and ideals, perhaps the profession will begin to change. </font></p>
<p><font class="nonprinting"><font size="+3">O</font>ne small sign of that change appeared this spring in the <i>American Economic Review</i>: a quite extraordinary full-page ad, titled "A Plea for a Pluralistic and Rigorous Economics" and signed by some of the most respected and well-known names in the profession. In it, these tribal elders--including Nobel laureates Paul Samuelson, Jan Tinbergen, Franco Modigliani, and Herbert Simon--denounce the "monopoly of method or core assumption" and call for "new spirit of pluralism" in the profession. The key analgesic they offer is a continued commitment to "rigor" even while rigorously identifying the problem they face: "Economists advocate free competition but will not practice it in the marketplace of ideas." As an acknowledgment of professional chaos, the ad is a courageous bit of work; perhaps the fig leaf of "rigor" is all the cover needed to let the fraternity move on. </font></p>
<p><font class="nonprinting">A larger sign has arrived with President Clinton and his new economic team. Tyson and Reich, and other Clinton political economists such as Ira Magaziner, Alan Blinder, Lawrence Katz, and Derek Shearer, represent a strong public policy perspective, a technically sophisticated understanding of real-world issues, an international orientation, and an openness both to government action and improved market functioning that stands in sharp contrast to the current fundamentalist upsurge inside the academy. Not simply updated Keynesians, but concerned (as Stuart Holland has termed it) with the "meso-economics" of social, market and political structures that lie between the micro world of the firm and individual consumer, and the macro world of national economies, they may well represent the dawn of the fresh new debate that their elders, especially in their call for a "pluralistic and open economics" say they want. Just as Keynes and <i>The General Theory</i> enlisted the state as deus ex machina to rescue the rent fabric of the market economy half a century ago, government in the personas of Tyson, Reich, et al engage the state to rescue the torn economic paradigm today simply by posing a different way of doing economics. </font></p>
<p><font class="nonprinting">But then, as far as academic economics is concerned, all this may not matter. As it did with older, once-honored disciplines like rhetoric, classics, and "moral sciences," time may inflict the ultimate wounds on this obdurate fraternity. Economists no longer command the prestige they once did. Some of the most influential people "doing economics" today are noneconomists. Much of what economists do is being done more effectively outside economics departments, in schools of public policy, business schools, and beyond the academy's walls. It is being done by demographers and pollsters, sociologists and historians, and even journalists. The grand theorist has been displaced by the personal computer (much of major economic-modeling forecasting can be done on PCs). With decreasing respect or need for economists in the outside world and declining enrollments in the grad schools, economics teaching may have to face the brutal inevitability of a diminished role: for undergrads, economics will be little more than prep school for an MBA; for grad students, a stepping stone into the hermetically circular world of what remains of the old paradigm. </font></p>
<p><font class="nonprinting">Inside the academy, economists will survive--there is no truer lover of free markets than the academic with tenure--but their survival may become finally of little note. For they are in danger of failing to become even what Keynes thought the best they could hope for: the "dentists" of social science--competent technicians in a distant but better world. </font></p>
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</div></div></div>Wed, 19 Dec 2001 18:48:05 +0000141476 at http://prospect.orgRichard Parker